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Income Tax Act, 1962 (Act No. 58 of 1962)

Chapter II : The Taxes

Part IVA : Withholding tax on royalties

49B. Levy of withholding tax on royalties


(a) There must be levied for the benefit of the National Revenue Fund a tax, to be known as the withholding tax on royalties, calculated—
(i) at the rate of 15 per cent; or
(ii) at such rate as the Minister may announce in the national annual budget contemplated in section 27() of the Public Finance Management Act, with effect from a date mentioned in that Announcement,

of the amount of any royalty that is paid by any person to or for the benefit of any foreign person to the extent that the amount is regarded as having been received by or accrued to that foreign person from a source within the Republic in terms of section 9(2)(c), (d), (e) or (f).

(b) If the Minister makes an announcement contemplated in paragraph (a)(ii), that rate comes into effect on the date determined by the Minister in that announcement and continues to apply for a period of 12 months from that date subject to Parliament passing legislation giving effect to that announcement within that period of 12 months.

[Section 49B(1) substituted by section 57 of the Taxation Laws Amendment Act, 2017 (Act No. 17 of 2017)]


(2) For the purposes of this Part, a royalty is deemed to be paid on the earlier of the date on which the royalty is paid or becomes due and payable.


(3) The withholding tax on royalties is a final tax.


(4) Where a person making payment of a royalty to or for the benefit of a foreign person has withheld an amount as contemplated in section 49E(1), that person must, for the purposes of this Part, be deemed to have paid the amount so withheld to that foreign person.


[Section 49B inserted by section 90(1) of the Taxation Laws Amendment Act, 2012 (Act No. 22 of 2012) - effective 1 July 2013]