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What is the purpose of the questions appearing on the FTW01 SARS form?

16 July 2015   (0 Comments)
Posted by: Author: SAIT Technical
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Author: SAIT Technical

Q: A client is liable to complete a FTW01 form for foreign tax that was withheld in Zimbabwe on services rendered. On page 2 of the form, under subsection "Contact Person in Foreign Tax Authority Details”, the following questions appear:

Have you approached the relevant Revenue Authority and raised your concern regarding the tax levied? Y or N?

Will the deduction of 6quin be influenced in any way by SARS if the above question is answered NO?

A: We don’t believe that it would impact on the availability of the rebate.  The question appears to relate to instances where the tax was not deducted in accordance with the relevant treaty.  

The Interpretation note (Issue 3 issued on 26 June 2015) explains section 6quin(3A) as follows:

"With effect from 1 July 2013 a resident who wishes to claim a foreign tax rebate under section 6quin on foreign taxes levied by a foreign government with which South Africa has a tax treaty and which have been withheld from payments made to the resident, must submit a return to SARS.

The return must be submitted to SARS within 60 days from the date on which the foreign tax is withheld. The return must be made on the "Declaration of foreign tax withheld – Section 6quin of the Income Tax Act (FWT 01)” form which is available on www.sars.gov.za. – see 7.6. Failure to submit the return within the 60-day period will result in the resident not being able to claim a section 6quin rebate as a deduction from normal tax.

Taxpayers who are unable to obtain all of the required supporting documentation within the 60-day period must submit the FWT 01 form within the 60 day period as required together with a letter explaining what supporting documentation is outstanding, the reason it is outstanding and the date by when it will be submitted.

This will allow SARS to consider the appropriateness of the reasons for the delay in submitting all of the required documentation within the time period specified in section 6quin(3A) and whether the return is still regarded as submitted even though all the required documentation has not been submitted. It is critical, however, that the return be submitted within the time period specified in section 6quin(3A).”

From that it is clear that approaching the relevant Revenue Authority is not relevant to the claiming of the rebate.

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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