My client (a
company) invoices its customers, which are in Botswana. The customers have withheld
10% of the payment as tax in Botswana. I have sent this information to SARS on
the FTW01 form.
How does this
affect the ITR14 tax return? Must the total amount of the withholding tax (WHT)
be deducted from their profits, as they have never received this money?
A: In our view the
full amount accrues to the taxpayer as gross income for the purposes of the tax
calculation and disclosure, notwithstanding that only 90% has been received due
to the WHT. The amount withheld as tax will possibly be claimable as a rebate
against the taxpayers SA tax liability hence the submission of the FTW01 form.
Disclaimer: Nothing in this query and answer should be construed as
constituting tax advice or a tax opinion. An expert should be consulted for
advice based on the facts and circumstances of each transaction/case. Even
though great care has been taken to ensure the accuracy of the answer, SAIT do
not accept any responsibility for consequences of decisions taken based on this
query and answer. It remains your own responsibility to consult the relevant
primary resources when taking a decision.
Section 240A of the Tax Administration Act, 2011 (as amended) requires that all tax practitioners register with a recognized controlling body before 1 July 2013. It is a criminal offense to not register with both a recognized controlling body and SARS.