non-residents and WHT

Question 1

Section 10(1)(h) of the ITA

Answer 1

Section 10(1)(h) of the ITA
- if you are a non-resident and you meet the requirements, the you get the interest is exempt from gross income

Question 2

s9(2)(i)

Answer 2

s9(2)(i) of the ITA
- Payable by a pension or provident fund in respect of services rendered in South
Africa is from a SA source. (the pension fund is in SA)
- Services rendered partly in SA and partly outside SA – apportionment required:
- SA source portion = (period during which serives were rendered in SA / total period for which services were rendered ) * annuity or pension

• remember that the DTA overules domestic law though

Answer 3

Section 10(1)(gC)(iii)and Section 9(2)(i) of the ITA
- because its coming from a foreign fund for years worked out outside south Africa, it receives an exemption from gross income
- but you need to be a resident of SA for this to apply

Question 4

What happens when a non-resident disposes of immovable property situated in the republic or any asset effectively connected to a permanent establishment within the republic?

Answer 4

Something to do with Para 2 of the eighth Schedule

Para 2 of 8th sch
- it till only be regarded as a disposal and need the 8th sch to be applied if the listed requirements are met
* they have at least 20% of the equity of the equity shares, or ownership or right to ownership of that company, alone or together with a connected person AND
* 80% of the value of those equity shares is directly or indirectly attributable to the immovable property
- both of these will obviously be met if they don’t own a company who owns the assets but rather just own the assets themselves

Question 5

What happens if the non-resident sells moveable property inside south africa?

Answer 5

s9(2)(k) of the ITA
- If the person is not a resident and the asset is effectively connected with a
permanent establishment of that person situated in SA it has a SA source

Question 6

What is the withholding tax rate typically?

Answer 6

15%

Question 7

When is there withholding tax on interest?

Answer 7

• normally when it is also exempt from gross income (has met those requirements)
• unless the DTA steps in

Question 8

When is there withholding tax on the sale of immovable property?

Answer 8

Section 35 and 35A of the ITA