Subsidiaries of a holding company wish to declare dividends to the holding company, after which the holding company would declare dividends to it's own shareholders. Should DWT be witheld and paid over by both the subsidiaries as well as the holding compa
Important:
This answer is based on tax law for the tax year ending 28 February 2020.
Answer:
We accept that both companies are resident in the RSA for tax purposes.
Such a dividend will then, accepting that the required declarations were made to the company, be exempt from the dividends tax - see section 64F(a) of the Income Tax Act.
When the holding company in turn declares and pays the dividend to its shareholders (beneficial owners), the dividend tax will have to be withheld. Unless of course the holders of shares qualify for an exemption, under section 64F, or a reduced rate – under a treaty.