Q: I have a client (a
company) in India that is a 100% owner of a SA private company. It gets a
dividend from the SA company and would like to know what proof can be provided that
the SA withholding tax on dividends has been paid. This is required so that the
company can claim this tax as a rebate in India.
A: Currently there is no prescribed form as the third party returns submitted
under section 26 of the Tax Administration Act to SARS (i.e. IT3(b)) are only
for SARS’ purposes. Historically the banks have been issuing an "IT3(b)” [which
was merely a letter in the same format as the IT3(a)] which indicated the
amount of interest and dividends with the relevant source codes.
In our view you
could issue the same as confirmation and should the Indian authorities require
additional proof, a copy of the DWT form and proof of payment could also be
provided if approved by the management of the SA company.
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.