1) Any person (other than a resident or a controlled foreign company) by whom any amount is received or to whom any amount accrues by virtue of -
a) the use or right of use in the Republic of, or the grant of permission to use in the Republic—
i) any patent as defined in the Patents Act, 1978 (Act No. 57 of I 1978), or any design as defined in the Designs Act, 1993 (Act No. 195 of 1993), or any trade mark as defined in the Trade Marks Act, 1993 (Act No. 194 of 1993), or any copyright as defined in the Copyright Act. 1978 (Act No. 98 of 1978), or any model, pattern, plan, formula or process or any other property or right of a similar nature; or
ii) any motion picture film, or any film or video tape or disc for use in connection with television, or any sound recording or advertising matter used or intended to be used in connection with such motion picture film, film or video tape or disc,
wheresoever such patent, design, trade mark, copyright, model, pattern, plan, formula, process, property, right, motion picture film, film, video tape or disc, sound recording or advertising matter has been produced or made or such right of use or permission has been granted or payment for such use, right of use or grant of permission has been made or is to be made, and whether such payment has been made or is to be made by a person resident in or outside the Republic; or
b) the imparting of or the undertaking to impart any scientific, technical, industrial or commercial knowledge or information for use in the Republic, or the rendering of or the undertaking to render, any assistance or service in connection with the application or utilisation of such knowledge or information, wheresoever such knowledge or information has been obtained or such knowledge or information has been imparted or is to be imparted or such assistance or service has been rendered or is to be rendered or any such undertaking has been given, and whether payment for such knowledge, information, assistance, service or undertaking has been made or is to be made by a person resident in or outside of the Republic,
shall be liable for tax, to be known as the withholding tax on royalties, which shall be levied and paid for the benefit of the National Revenue Fund at a rate of 12 per cent of such amount: Provided that the provisions of this subsection shall not apply in respect of any amount which is received by or accrues to any—
i) person who is not a resident, if such amount is effectively connected with a permanent establishment of that person in the Republic;
ii) [deleted by the Revenue Laws Amendment Act, 2007 (Act No. 35 of 2007)].
2)
a) Any person who incurs a liability to pay to any other person who is not a resident any amount referred to in subsection (1), or who receives payment of any such amount on behalf of such other person, shall within 14 days after the end of the month during which the said liability is incurred or the said payment is received, as the case may be, or within such further period as the Commissioner may approve, make a payment (which shall be final payment made on behalf of such other person) to the Commissioner in respect of such other person's liability for tax in terms of subsection (1) and shall submit to the Commissioner at the time of such tax payment a declaration in such form as the Commissioner may prescribe: Provided that--
i) if the Commissioner is satisfied that the tax payment required to be made in terms of this paragraph in respect of the said amount has been or will be made by any person, the Commissioner may direct that any other person who is in terms of this paragraph required to make a tax payment in respect of the said amount, shall be relieved of the duty to make such payment;
ii) for the purposes of this subsection a person having an address outside the Republic shall until the contrary is proved be deemed not to be a resident, and
iii) this paragraph shall not be construed as requiring any person to make a tax payment in terms of this paragraph in respect of any liability to pay any amount in respect of the use in the Republic of or the grant of permission to use in the Republic or the imparting of or the undertaking to impart any knowledge directly or indirectly connected with the use in the Republic of any motion picture film or any sound recording or advertising matter used or intended to be used in connection with such film, if such liability was incurred and discharged before the commencement of the Income Tax Amendment Act, 1962.
b) Any person making a payment to the Commissioner in terms of paragraph (a) shall, notwithstanding any agreement to the contrary, be entitled to deduct or withhold the amount of such payment from the amount which he is liable to pay to the aforesaid other person, or to recover the amount so paid from such other person or to retain out of any money that may be in his possession or may come to him as the agent of such other person an amount equal to the amount of such payment.
c) [deleted by the Revenue Laws Amendment Act, 2003]
d) A taxpayer on whose behalf a payment has been made to the Commissioner in terms of paragraph (a) shall not be entitled to recover the amount of such payment from the person who under the provisions of paragraph (b) deducts, withholds or retains the amount of such payment and shall be deemed to have received the amount so deducted or withheld.
e) Every person who is required to make a payment to the Commissioner in terms of paragraph (a) shall be personally liable for making such payment, and the amount so payable shall be deemed to be a tax due by such person and shall be recoverable from him in the manner prescribed in section 97.
f) [deleted by Revenue Laws Second Amendment Act No. 32 of 2005].
3) The general provisions contained in Parts I to VI of Chapter III of this Act shall mutatis mutandis apply in respect of any withholding tax on royalties payable in terms of this section.