64G.    Withholding of dividends tax by companies declaring and paying dividends

(1)     Subject to subsections (2) and (3), a company that declares and pays a dividend must withhold an amount of dividends tax from that payment calculated as contemplated in section 64E except to the extent that the dividend consists of a distribution of an asset in specie.

[Sub­section (1) substituted by section 80(1) of Act 24 of 2011, by section 88(1)(a) of Act 22 of 2012, by section 106(1) of Act 31 of 2013 and by section 45 of Act 34 of 2019]

(2)     A company must not withhold any dividends tax from the payment of a dividend contemplated in subsection (1) if-

(a)     the person to whom the payment is made has, before the dividend is paid, submitted to the company-

(i)      a declaration by the beneficial owner in such form as may be prescribed by the Commissioner that the dividend is exempt from the dividends tax in terms of section 64F or an agreement for the avoidance of double taxation; and

[Subparagraph (i) substituted by section 33(1) of Act 20 of 2021 effective on 1 January, 2022 and applicable in respect of dividends paid on or after that date]

(ii)     a written undertaking in such form as may be prescribed by the Commissioner to forthwith inform the company in writing, should the circumstances affecting the exemption applicable to the beneficial owner referred to in subparagraph (i) change or the beneficial owner cease to be the beneficial owner;

[Paragraph (a) amended by section 88(1)(b) of Act 22 of 2012 and substituted by section 7(1)(a) of Act 33 of 2019]

(b)     the beneficial owner forms part of the same group of companies, as defined in section 41, as the company that paid the dividend; or

(c)     the payment is made to a regulated intermediary.

(3)     A company must withhold dividends tax from the payment of a dividend contemplated in subsection (1) at a reduced rate if the person to whom the payment is made has, before the dividend is paid, submitted to the company-

(a)     a declaration by the beneficial owner in such form as may be prescribed by the Commissioner that the dividend is subject to that reduced rate as a result of the application of an agreement for the avoidance of double taxation; and

(b)     a written undertaking in such form as may be prescribed by the Commissioner to forthwith inform the company in writing, should the circumstances affecting the reduced rate in paragraph (a) change or should the beneficial owner cease to be the beneficial owner.

[Sub­section (3) substituted by section 73(1) of Act 7 of 2010, amended by section 88(1)(c) of Act 22 of 2012 and substituted by section 7(1)(b) of Act 33 of 2019]

(4)     A declaration and written undertaking submitted in terms of subsection (2)(a) or (3) are no longer valid after a period of five years from the date of the declaration, unless the company that is making the payment is subject to the provisions of-

(a)     the Financial Intelligence Centre Act, 2001 (Act 38 of 2001);

(b)     the Agreement Between the Government of the Republic of South Africa and the Government of the United States of America to improve International Tax Compliance and to Implement the US Foreign Account Tax Compliance Act; or

(c)      the regulations for purposes of paragraph (a) of the definition of “international tax standard” in section 1 of the Tax Administration Act,

with regard to the person to whom the payment is made and takes account of these provisions in monitoring the continued validity of the declaration.

[Subsection (4) added by section 7(1)(c) of Act 33 of 2019 effective on 1 July, 2020]