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Income Tax Act, 1962 (Act 58 of 1962)

Chapter II: The Taxes

Part IVB : Withholding tax on interest

50E. Withholding of withholding tax on interest by payers of interest

 

(1) Subject to subsections (2) and (3), any person who makes payment of any amount of interest to or for the benefit of a foreign person must withhold an amount of withholding tax on interest calculated at the rate contemplated in section 50B(1) from that payment.

[Subsection (1) substituted by section 65 of Act No. 43 of 2014 - effective 1 March 2015 (substituted by section 154 of Act No 25 of 2015)]]

 

(2)        A person must not withhold any amount from any payment contemplated in subsection (1)—

(a)        to the extent that the interest is exempt from the withholding tax on interest in terms of section 50D(1); or

(b)        if the foreign person to or for the benefit of which that payment is to be made has-

(i) by a date determined by the person making the payment; or
(ii) if the person making the payment did not determine a date as contemplated in subparagraph (i), by the date of the payment,

submitted to the person making the payment a declaration in such form as may be prescribed by the Commissioner that the foreign person is, in terms of section 50D(3), or an agreement for the prevention of double taxation, exempt from the withholding tax on interest in respect of that payment.

[Words following subsection (2)(b)(ii) substituted by section 57 of the Taxation Laws Amendment Act, 2016 (Act No. 15 of 2016)]

 

(3) The rate referred to in subsection (1) must, for the purposes of that subsection, be reduced if the foreign person to or for the benefit of which the payment contemplated in that subsection is to be made has—

(a)        by a date determined by the person making the payment; or

(b) if the person making the payment did not determine a date as contemplated in paragraph (a), by the date of the payment, submitted to the person making the payment—
(i) a declaration in such form as may be prescribed by the Commissioner that the interest is subject to that reduced rate of tax as a result of the application of an agreement for the avoidance of double taxation; and
(ii) a written undertaking in such form as may be prescribed by the Commissioner to forthwith inform the person making the payment in writing should the circumstances affecting the application of the agreement referred to in subparagraph (i) change.

 

[Section 50E inserted by section 98(1) of Act No. 31 of 2013 - effective 1 March 2015 (substituted by section 125 of Act Nof. 43 of 2014)]