Where I’m confused is, according to SARS when completing a tax return you should use the withholding tax amount – if we look at the Stanlib certificate this amount would be R51.37. Old Mutual Wealth has said that the full amount is subjected to local inte
Important:
This answer is based on tax law year ending 28 February 2017.
Answer:
We can’t comment on why the two entities issue the documents in the way they do. For an RSA resident it would only be in respect of interest from a foreign source that a withholding tax can potentially arise (as explained in our first response).
The principle, as explained is that the tax withheld (under section 50E of the Income Tax Act) is only applicable when the interest is paid to a foreign person (section 50A) and the exemption doesn’t apply. This is more evident from the Old Mutual one. We also don’t know what is disclosed next to the asterix (next to local withholding tax) on the Stanlib one.
We expect that there would only be an amount on the Stanlib one where the recipient is not a resident. We don’t know if Old Mutual will issue a different IT3 to a person not resident in the RSA.