35A. Withholding of amounts from payments to non-resident sellers of immovable property
(1) Any person (hereinafter referred to as ‘the purchaser’) who must pay any amount to any other person who is not a resident (hereinafter referred to as ‘the seller’), or to any other person for or on behalf of that seller, in respect of the disposal by that seller of any immovable property in the Republic must, subject to subsection (2), withhold from the amount which that person must so pay, an amount equal to-
(a) 7,5 per cent of the amount so payable, in the case where the seller is a natural person;
[Paragraph (a) substituted by section 10 of Act 14 of 2017 effective on 22 February 2017, applies in respect of any disposal on or after that date]
(b) 10 per cent of the amount so payable, in the case where the seller is a company;
[Paragraph (b) substituted by section 10 of Act 14 of 2017 effective on 22 February 2017, applies in respect of any disposal on or after that date and amended by section 47 of Act 17 of 2017 effective on 18 December 2017]
(c) 15 per cent of the amount so payable, in the case where the seller is a trust; and
[Paragraph (c) substituted by section 10 of Act 14 of 2017 effective on 22 February 2017, applies in respect of any disposal on or after that date and amended by section 47 of Act 17 of 2017 effective on 18 December 2017]
(d) a percentage of the amount so payable as the Minister may announce in the national annual budget contemplated in section 27(1) of the Public Finance Management Act, with effect from a date mentioned in that Announcement.
[Paragraph (d) added by section 47 of Act 17 of 2017 effective on 18 December 2017]
(1A) If the Minister makes an announcement contemplated in subsection (1)(d), that rate comes into effect on the date determined by the Minister in that announcement and continues to apply for a period of 12 months from that date subject to Parliament passing legislation giving effect to that announcement within that period of 12 months.
[Subsection (1A) inserted by section 47 of Act 17 of 2017 effective on 18 December 2017]
(2) The seller may apply to the Commissioner, in the form and at the place as the Commissioner may determine, for a directive that no amount or a reduced amount be withheld by the purchaser in terms of subsection (1) solely having regard to-
(a) any security furnished for the payment of any tax due on the disposal of the immovable property by the seller;
(b) the extent of the assets of the seller in the Republic;
(c) whether that seller is subject to tax in respect of the disposal of the immovable property; and
(d) whether the actual liability of that seller for tax in respect of the disposal of the immovable property is less than the amount contemplated in subsection (1).
(3)
(a) The amount withheld from any payment to the seller in terms of subsection (1) is an advance in respect of that seller’s liability for normal tax for the year of assessment during which that property is disposed of by that seller.
[Subsection renumbered as paragraph (a) by section 2 of Act 23 of 2015 effective on 8 January 2016]
(b) If the seller does not submit a return in respect of that year of assessment within 12 months after the end of that year of assessment, the payment of the amount in terms of subsection (4) is a sufficient basis for an assessment in terms of section 95 of the Tax Administration Act.
[Paragraph (b) added by section 2 of Act 23 of 2015 and substituted by section 2 of Act 16 of 2016]
(4) The amount withheld by a purchaser in terms of subsection (1), must be paid to the Commissioner-
(a) where that purchaser is a resident, within 14 days after the date on which that amount was so withheld; or
(b) where that purchaser is not a resident, within 28 days after the date on which that amount was so withheld.
(5) If an amount has been withheld in terms of subsection (1) from any amount payable in a foreign currency, that amount so withheld must be translated to the currency of the Republic at the spot rate on the date that the amount is paid to the Commissioner.
(6) The purchaser must, together with the payment contemplated in subsection (4), submit to the Commissioner a return.
(7) A purchaser is person ally liable under the circumstances contemplated in section 157 of the Tax Administration Act, for the amount that must be withheld under subsection (1) only if the purchaser knows or should reasonably have known that the seller is not a resident and must pay that amount to the Commissioner not later than the date on which payment should have been made if the amount had in fact been withheld.
(8) Subsection (7) does not apply if a property practitioner or conveyancer assists in the disposal of the immovable property and that property practitioner or conveyancer fails to notify the purchaser as contemplated in subsection (11).
[Subsection (8) substituted by section 33(a) by Act 17 of 2023]
(9) If a purchaser fails to pay any amount contemplated in subsection (1) to the Commissioner within the period allowed for payment in terms of subsection (4), that purchaser must pay a penalty equal to ten per cent of the amount, in addition to any other penalty or charge for which he or she may be liable under this Act.
[Subsection (9) substituted by section 271 read with paragraph 43(c) of Schedule 1 of Act 28 of 2011 effective on 1 October, 2012 except to the extent that it relates to interest under this Act: Proclamation No. 51 in Government Gazette 35687 of 14 September, 2012]
[Subsection (9) substitution by section 271 read with paragraph 43(c) of Schedule 1 of Act 28 of 2011 has only partially commenced to the extent that the amendment relates to the penalty and not to the extent it relates to interest]
(9) If a purchaser fails to pay any amount contemplated in subsection (1) to the Commissioner within the period allowed for payment in terms of subsection (4), that purchaser-
(a) is liable for interest at the prescribed rate on any amount outstanding calculated from the day following the last date for payment to the date that the amount is received by the Commissioner; and
(b) must pay a penalty equal to ten per cent of that amount, in addition to any other penalty or charge for which he or she may be liable under this Act.
(10) ……….
(11) Any property practitioner and any conveyancer who is entitled to any remuneration or other payment in respect of services rendered in connection with the disposal of the immovable property by the seller or the registration of transfer, as the case may be, must before any payment is made to the seller each notify the purchaser in writing of the fact that the seller is not a resident and that the provisions of this section may apply.
[Subsection (11) substituted by section 33(b) by Act 17 of 2023]
(12) If a property practitioner or conveyancer knows or should reasonably have known that the seller is not a resident and fails to comply with subsection (11), that failing Property practitioner or conveyancer is jointly and severally liable for the payment of the amount which the purchaser is required to withhold and pay to the Commissioner in terms of this section, but limited to the amount of remuneration or other payment in respect of the services rendered in connection with the disposal of the immovable property by the seller or the registration of transfer, as the case may be.
[Subsection (12) substituted by section 33(c) by Act 17 of 2023]
(13) The property practitioner or conveyancer who paid an amount in terms of subsection (12) is deemed to be a withholding agent for purposes of the Tax Administration Act.
[Subsection (13) substituted by section 271 read with paragraph 43(e) of Schedule 1 of Act 28 of 2011 and by section 33(d) by Act 17 of 2023]
(14) This section does not apply-
(a) if the amounts payable by the purchaser to the seller and to any other person for or on behalf of the seller, in respect of the acquisition by that purchaser of the immovable property, in aggregate do not exceed R2 million; or
(b) in respect of any deposit paid by a purchaser for purposes of securing the disposal of the immovable property by the seller to that purchaser, until the agreement for that disposal has become unconditional, in which case any amount which would have been required to be withheld from the amount of that deposit, must be withheld from the first following payments made by that purchaser in respect of that disposal.
[Paragraph (b) substituted by section 57 of Act 25 of 2015 effective on 8 January 2016]
(15) For purposes of this section-
‘conveyancer’ means a ‘conveyancer’ as defined in section 102 of the Deeds Registries Act, 1937 (Act No. 47 of 1937);
“estate agent” . . . . . .
[Definition of “estate agent” deleted by section 33(e) of Act 17 of 2023]
‘foreign currency’ means any currency other than the currency of the Republic;
“immovable property” means immovable property contemplated in paragraph 2(1)(b)(i) and (2) of the Eighth Schedule; and
[Definition of “immovable property” substituted by section 33(f) of Act 17 of 2023]
“property practitioner” means a property practitioner as defined in section 1 of the Property Practitioners Act, 2019 (Act 22 of 2019).
[Definition of “property practitioner” added by section 33(g) of Act 17 of 2023]