On 24 February 2014, SARS released information on their website pertaining to the interest withholding tax ("IWT”), which came into effect on 1 March 2015.
It is interesting to note that SARS refers to the section 24J definition of interest on the website. SARS has, in the past, indicated that the IWT provisions will apply to common law interest.
The Withholding Tax on Interest Declaration ("WTID”) has been made available. It is stipulated that the foreign recipient exemptions provided for in the Income Tax Act will not apply unless this declaration has been completed and submitted to the payor of the interest before payment is made. This declaration should be kept for a period of five years since SARS could request it.
SARS also released summaries of double taxation convention ("DTA”) rates. These summaries also include extracts from the Article on Interest in the relevant DTAs.
Withholding agents will need to submit the WT002 – Declaration of Withholding Tax on Interest to SARS before the end of the month after the month in which the interest was paid, i.e. the first WT002 will have to be submitted by the end of April 2015.
Click here to be directed to the Interest Withholding Tax page on the SARS website.
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.