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What documentation can one provide as proof to foreign tax authorities?

23 February 2015   (0 Comments)
Posted by: Author: SAIT Technical
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Author: SAIT Technical

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.


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