Due to delays encountered by various stakeholders in implementing and developing systems to administer dividend withholding tax (DWT), which was introduced on 1 April 2012, SARS is adopting a phased approach to enforce the new tax.
SARS' phased approach
Initially, in order to facilitate the timely payment of DWT on dividends paid from 1 April 2012, a standardised return, DTR02 was made available which allowed the manual capturing of DWT due.
The second phase requires transaction data to be submitted through the submission of a Dividends Tax Transactions Information declaration, or DTR01. SARS has now informed companies that the DTR01 has to be completed in respect of all DTR02s previously submitted for dividends paid after 1 April 2012. The deadline for the submission of DTR01 forms for DWT previously declared is set for 1 March 2013.
However, from 1 January 2013, a DTR01 must be submitted to SARS for dividends paid on or after this date. Once the DTR01 is successfully filed, the DTR02 must be requested via eFiling and filed by the company or regulated intermediary paying the dividends.
DTR01 data requirements
Information regarding dividends received and dividends paid must
be supplied and will allow SARS to track and match DWT data.
For dividends paid by the company the following must be provided for each beneficial shareholder to whom a dividend is paid:
- legal name
- identity number or registration number
- income tax number
- tax residency
- any criteria qualifying the beneficial owner for reduced DWT (including an exemption from DWT)
Similarly, in order for SARS to track dividends which are exempt from DWT, companies must declare all dividends received. The information required for each dividend received includes:
- The ISIN number of JSE listed shares on which the dividend is received
- The date that the dividend is declared, paid and received
- The STC credit utilised per share
- The dividend amount received per share
Supporting documentation required for preparation of DTR01
Signed declarations are required from the beneficial owner if dividends are paid to a beneficial owner who is:
- exempt from DWT (e.g. if the dividend is paid to a SA registered company)
- or is subject to DWT at a reduced rate (e.g. if the dividend is paid to a foreign shareholder who is entitled to a reduced rate of DWT in terms of a double tax agreement). If a reduced DWT rate applies, the signed declaration must state the reduced rate.
The beneficial owner is required to inform the dividend paying
company when the beneficial owner's DWT status is altered, or
when it will no longer be a beneficial owner of future dividends
SARS do not provide declaration forms to be completed by beneficial owners. The company paying the dividend is responsible to provide a declaration form. Contact your Grant Thornton office for assistance when preparing such a form.
Channels for filing DTR01 and DTR02 returns
- Companies paying dividends to 20 or fewer beneficial ownersmay file their DTR01 and DTR02 returns using SARS' eFiling system or by capturing the data at a SARS branch office.
- Companies with more than 20 and fewer than 10 000 beneficial owners will need to file DTR01 and DTR02 returns via e@syFile.
Don't delay preparing and submitting your DTR01 and
SARS have indicated that for DTR02 returns previously submitted, the accompanying DTR01 return is to be submitted by 1 March 2013. In order to allow for the timely payment of DWT payable on future dividends, DTR01 and DTR02 returns are to be submitted by the end of the month following the month during which the dividend was paid.
Administering this newly introduced tax will undoubtedly cause some teething problems and frustration. Some areas of concern include:
- The DTR01 return requires information to be included which may not have been collected from beneficial shareholders in the past. If not obtained in time, the issuing and filing of the DWT return (DTR02) for current dividends paid, may be delayed and result in late submission. Such a late submission will expose the dividend paying company to interest and penalty charges.
- The DTR01 return further requires data to completed in line with SARS' formatting requirements and should therefore not be left to the last minute.
To avoid penalties, frustration and wasted time, start this process as soon as possible and if you have any questions, contact your Grant Thornton office for assistance.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.