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What is Withholding Tax on Interest WTI?

What exemptions or reduced rates apply for Withholding Tax on Interest WTI

• The payor (the person paying the interest)
• The instrument (the instrument giving rise to the interest, e.g. the debt or the investment)
• The foreign person (the recipient of the interest).

• The Government of South Africa (national, provincial or local sphere)
• Any bank, including the South African Reserve Bank (SARB), Development Bank of South Africa or Industrial Development Corporation or
• A headquarter company relating to financial assistance where the headquarter company directly or indirectly holds 10% of the equity and voting rights.

• In connection with listed debt, e.g. bonds listed on the Johannesburg Stock Exchange (JSE)
• Interest payable to any foreigner that is a client, to whom a regulated person provides securities services, acts as an agent for another person about those services in which case it will include the agent or exclude the other person, if the contractual arrangement between the parties shows this to be the intention.

• They are a natural person who was here in South Africa for a period more than 183 days in total during the 12 months before the date when the interest is paid; or
• The debt claim for which interest is paid is effectively connected with a permanent establishment of the foreign person who is registered as a taxpayer in South Africa.

When and how should it be paid?

Withholding Tax on Interest WTI can be paid to SARS only electronically via eFiling, see how to pay via eFiling.

A payor must submit the Return for Withholding Tax on Interest (WT002), which is a summary of the total of all interest payments made and tax withheld during a month, to SARS. The WT002 and the payment must be submitted to SARS before the end of the month after the month in which the interest was paid.

What else is needed?

• An IT3(b) – Certificate of Income from Investments, Property Rights and Royalties must be completed and given to the foreigner and SARS.
  • Submission of the IT3(b)s to SARS can be done using one of the Third Party Data Submission Platforms. Follow the guidelines for the submission of Third Party Data as set out in the SARS External Business Requirement Specification (BRS) – IT3 Data Submission (2014 version 2.0.3) for submissions periods starting 01 March 2021 and afterwards use the updated SARS IT3 BRS i.e. SARS_External BRS_2020_IT3s_v3.0.0-32.
• IT3(s) – Tax Free Savings/Investments and Withholding Tax on Interest (WTI)
  
  • For the 12 month period 1 March  to 28 February due by 31 May of the next year using the updated BRS version 2.0.3 for submissions periods starting 01 March 2021 and afterwards use the updated SARS IT3 BRS i.e. SARS_External BRS_2020_IT3s_v3.0.0-32.
  • Only one 12 month submission will be needed for Tax Free Savings/Investments and WTI.

How to pay Withholding Tax on Interest South Africa WTI on eFiling South Africa

Step 1: Register for WTI

• Log on to the eFiling website with your eFiling Login Name and Password.
• Check if the ‘Income Tax’ under ‘Tax Types’ has been activated for eFiling. If not, please activate the Income Tax reference number.
• If you register as a ‘Company representative’, it must be your individual income tax reference number completed in the representative screen and not the company tax reference number.

• Before you proceed with registering, please make sure that your ‘rights’ have been activated. If you are a tax representative or a tax practitioner, add the ‘Withholding Tax on Interest (WTI)’ tax type to the group details:
  • Select ‘Organisations’
  • Click on ‘Rights Groups’
  • Select ‘Manage Groups’
  • Click on ‘Open’
  • Select the ‘Authorisation Level’
  • Mark the check box for ‘Withholding Tax on Interest (WTI)’:

• To register for the WTI on eFiling:
  • If you are a Tax Practitioner or  Tax Representative, select a taxpayer from the drop down list and then click on:
    • ‘Organisations’
    • ‘SARS Registered Details’
    • ‘Register Withholding Tax on Interest’
  • If you are an Individual click on:
    • ‘Home’
    • ‘SARS Registered Details’
    • ‘Register Withholding Tax on Interest’

• Read the disclaimer on the screen below:
  • Select ‘I Agree’
  • Click on ‘Continue’

• When the ‘Continue’ button is clicked the system will validate if the taxpayer is activated for Income Tax on eFiling.
• If not activated for Income Tax on eFiling an error message will display:
  • If you do not have an Income Tax number, please contact the SARS Contact Centre for assistance or visit your nearest SARS Branch to register for Income Tax.
  • If you do have a valid Income Tax number, please use the Tax Types option to activate for Income Tax on eFiling. 
• If you are not an Active Registered Representative or an Active Tax Practitioner, an error message will display:
  • To activate as a representative, please select the following options:
    • ‘Organisations’
    • ‘SARS Registered Details’
    • ‘Activate Registered Representative’
  • To activate as a tax practitioner, please select the following options to activate:
    • ‘Services’
    • ‘My TP Configuration’
    • ‘Practitioner Activation’

• If the tax number is successfully activated for Income Tax on eFiling, the following screen will display:
  • The ‘Taxpayer Details’ will be pre-populated as per the taxpayer’s eFiling profile.
  • Click on the calendar icon and select the date from which you are liable for WTI. This date cannot be before 1 March 2015.
  • Click on ‘Register’.

• A pop up screen will display to confirm that the WTI registration was successful. Click on ‘Continue’. The ‘Activation for Withholding Tax on Interest’ screen will display next.

Step 2: Activate WTI

• Click on ‘Returns’
  • Then on ‘Activation’:

• Select ‘Returns’ and then click the following:
  • ‘Non-Core Taxes’
  • ‘Withholding Tax on Interest’
  • ‘Activation’

• The activation screen will display:
  • The ‘Taxpayer Information’ will be prepopulated with the data available.
  • If the prepopulated information is incorrect, click on ‘Update Details’ to make the relevant changes.
  • If the prepopulated information is correct, select the checkbox for the disclaimer “I confirm the information above is correct and true for the taxpayer concerned”
  • Click on ‘Activate’.

• Click on ‘OK’ on the pop-up message to confirm you want to activate the tax number for Withholding Tax on Interest:

• The activation request will be validated by the system:
  • If the WTI activation is pending approval the following message will display:“Your activation request has been sent and is currently pending approval. Please check back again to see if your activation has been successful.”

• If your information does not match the SARS records the following message will display:“Unfortunately, we could not match the details supplied. Please check that all details are correct and try again or contact us if the problem persists”.
  
• Please contact the SARS contact centre on 0800 00 7277 for assistance.
• If the reference number is activated for Withholding Tax on Interest, the status will indicate ‘Successfully Activated’

Step 3: Deactivate WTI (if neccessary)

• Select ‘Returns’ and then click the following:
  • ‘Non-Core Taxes’
  • ‘Withholding Tax on Interest’
  • ‘Activation

• The activation screen will display:
  • Click on ‘Deactivate’
  • Click on ‘OK’ on the pop-up message to confirm deactivation.

• The deactivation will be confirmed.

Step 4: Complete the Return

•  Click ‘OK’ on the pop up screen to proceed with the payment. (The ‘Payment Details’ screen will display).

• On the Payment Details screen:
  • Select the bank account from the drop down list.
  • Ensure that the payment request date is correct.
  • Click on ‘Pay Now’ (The ‘Confirm Payment Initiation’ screen will display).

• On the Confirm Payment Initiation screen click on ‘Confirm’:

• A pop up message will display for you to confirm the payment amount, account and date of payment. Click on ‘OK’ to proceed.

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• The payment initiation result will display:

• On the Confirm Payment Initiation screen click on ‘Confirm’:

• A pop up message will display for you to confirm the payment amount, account and date of payment. Click on ‘OK’ to proceed.

• The payment initiation result will display:
  • Please log on to your bank account to authorize the payment.

• After the payment is authorized the payment status will change to ‘Payment Successful’:

For more information Visit the Official webpage Click here

South African Revenue Service SARS

The South African Revenue Service (SARS) is the nation’s tax collecting authority. Established in terms of the South African Revenue Service Act 34 of 1997 as an autonomous agency, we are responsible for administering the South African tax system and customs service.

Role Of South African Revenue Service SARS

• Increased Customs and Excise compliance
• Increased tax compliance
• Increased ease and fairness of doing business with SARS
• Increased Cost effectiveness and Internal Efficiencies
• Increased public trust and credibility.

South African Revenue Service SARS eFilling

The Notice of Registration functionality on eFiling was enhanced.  The current Notice of Registration functionality for PIT and VAT has now been extended to include CIT, PAYE and Trusts. eFilers can now access their Notices of Registration for all tax types online. Follow these easy steps:

For Organizations:

• Step 1 – Login to https://www.sarsefiling.co.za/
• Step 2 – Go to the Organizations main menu
• Step 3 – Click SARS Registered details on the side menu
• Step 4 – Select Notice of Registration
• Step 5 – Select the relevant tax type: VAT or CIT or PAYE or Trusts

For Individuals:

• Step 1 – Login to https://www.sarsefiling.co.za/
• Step 2 – Click on the Notice of Registration icon on the top right side of the screen
• Step 3 – Click on Request new or view

1. The SARS eFiling web site provides Users with access to and use of information about the eFiling service and eFilers with access to the eFiling service.
2. The eFiling service provides the eFiler with the ability to access, conclude, deliver, receive and read electronic filing transactions.
3. When the eFiler submits a return, as defined in the Act, in the form of an electronic filing transaction to the eFiling service, the eFiling service forwards the return to the relevant tax system and, within a reasonable time, by return electronic filing transaction, confirms to the eFiler, on their electronic filing page, whether such return has been accepted and processed by SARS.
4. In case of a payment to SARS through the eFiling service, provided that the eFiler has complied with all the prescribed procedures for making such payment, the eFiling service will store an electronic filing transaction, containing a record of such payment on the electronic filing page of the eFiler. To enable this functionality, SARS co-operates with various banks (“SARS’ banking partners”), who on instruction from the eFiler concludes the payment. The electronic filing transaction is merely a record of such payment. The arrangement for payment to SARS is between the eFiler and the SARS’ banking partners. Although SARS’ banking partners take reasonable steps to secure payment information and use payment systems that are sufficiently secure with reference to accepted technological standards, SARS shall not be liable for any claims, losses or damages suffered by the eFiler in respect of such arrangement.