• Service: Tax, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 11/12/2013

South Africa - Withholding tax on interest effective beginning 2015 

November 12:  Legislative proposals in South Africa provide for a withholding tax on interest, imposed at a rate of 15% and to be effective 1 January 2015—i.e., with respect to interest that is paid or that becomes due and payable on or after that date

Also, the legislation would clarify the rate of withholding tax on royalties. Previously, it was uncertain whether the “new royalty withholding tax” rate of 15% or the former rate of 12% applied. Under the proposal, the 12% withholding tax on royalties would apply until 1 January 2015 after which the 15% withholding tax rate will apply.

The withholding tax on service fees (at a rate of 15%) would be effective 1 January 2016 and would apply in respect of service fees that are paid or become due and payable on or after that date.

KPMG observation

Tax professionals in South Africa anticipate changes to the services withholding tax regime before the effective date 1 January 2016.

Read a November 2013 report prepared by the KPMG member firm in South Africa: Update on South Africa withholding taxes

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