Withholding Tax for Non-residents Entertainers and Sportspersons – Layman Version

South African Tax for Foreign Entertainers and Sportspersons: A Simple Guide

 

If you’re a foreign entertainer or sportsperson coming to perform in South Africa, here’s what you need to know about your tax obligations, explained in straightforward terms:

 

What is this Tax?

• • When a foreign entertainer or sportsperson gets paid for specific activities they do in South Africa, a special tax called withholding tax is applied.
  • This tax is set at 15% of the payment.
  • Usually, the South African person or company (like a promoter or sponsor) who is paying you is responsible for deducting this 15% from your payment and sending it to SARS (the South African Revenue Service).
  • However, if another non-South African entity or person pays you, then you, the foreign entertainer or sportsperson, are directly responsible for paying this tax yourself.
  • This 15% withholding tax is considered a final tax, which means you cannot deduct any expenses or allowances from it to reduce the amount you owe.

Who is Responsible for Paying the Tax to SARS?

• • Typically, the South African resident who organizes or promotes the event and pays you is the one who must send the tax to SARS.
  • If a non-resident (someone not living in South Africa) pays you, then you, the foreign entertainer or sportsperson, are directly responsible for handling your own tax payment to SARS.

What Happens if You Don’t Follow the Rules?

• • For the South African Resident Organizer: If the South African resident responsible for the event fails to comply, there are serious consequences:
    • They can be found guilty of a crime, which could lead to a fine or even imprisonment for up to two years.
    • They could also be held personally responsible for paying the withholding tax themselves.
    • Specifically, this applies if they fail to:
      • Inform SARS about the planned event.
      • Withhold the correct tax from payments to non-resident entertainers/sportspersons.
      • Pay the withheld tax over to SARS.
    • For the Foreign Entertainer or Sportsperson:
      • If you receive payment from a non-resident and don’t declare or pay your taxes, you might be denied entry into South Africa if you try to return in the future.
    • When Will the 15% Withholding Tax NOT Apply?
    • The standard 15% withholding tax rate won’t be used if you meet both of the following conditions. Instead, you’ll be taxed at normal South African income tax rates:
      • You are an employee of a South African resident.
      • You are physically present in South Africa for more than 183 full days (roughly six months) during any 12-month period that starts or ends in the tax year your performance takes place.
    • How to Pay the Tax: A Step-by-Step Guide

Step 1: Notify SARS About the Event

• • • The South African resident primarily organizing your performance must complete a form called NR01 – Notification of Performance of Foreign Entertainer or Sportsperson.
    • If a non-resident employer is involved, the responsibility to submit this form falls directly on the foreign entertainer or sportsperson.
    • This form must be sent to the SARS Visiting Artist Team within 14 days of making the agreement with the entertainer or sportsperson.
    • The following documents must be included with the NR01 form:
      • Signed copies of the agreements between the entertainer/sportsperson and the South African organizer/promoter.
      • Passport copies.
      • A calculation of the 15% withholding tax.
      • Confirmation of all income earned while in South Africa.
      • Confirmation of the exchange rate provided by a South African commercial bank.
    • These documents should be emailed to dswart@sars.gov.za and also copied to nres@sars.gov.za.

Step 2: Get a Tax Number

• • • SARS will register the foreign entertainer or sportsperson for income tax purposes and give them a tax reference number.

Step 3: Get Your Tax Bill (Assessment)

• • • SARS will use the income figures you provided with the NR01 form to calculate your tax bill, known as an assessment.
    • Any earnings in foreign currency must be converted into South African Rand using the bank’s exchange rate on the date the tax was withheld.

Step 4: Disagree with the Tax Bill? (Object or Appeal)

• • • If the foreign entertainer/sportsperson or the promoter doesn’t agree with the tax assessment, they have the right to object to it.
    • You must complete a Notice of Objection (NOO) form and email it to the SARS contact person indicated in your assessment letter within 30 days of receiving the assessment. SARS will then review your objection.

Step 5: Paying the Tax to SARS

• • • The South African promoter/taxpayer must pay the tax to SARS using the foreign entertainer’s or sportsperson’s income tax reference number, which will be shown on the assessment.
    • If the South African resident withholds the tax, they must pay it to SARS using that same tax reference number by the end of the month following the month in which they deducted or withheld the tax.

What if the South African Resident Doesn’t Pay the Withheld Tax?

• • • If the resident fails to pay the withheld tax to SARS:
      • If they are not registered for PAYE (Pay As You Earn), SARS will register them for PAYE and issue an additional tax bill for the unpaid amount.
      • If they are already registered for PAYE, SARS will issue an additional PAYE assessment for the overdue amount.
    • Annual Reconciliation: The South African resident must submit an EMP501 reconciliation form to SARS at the end of the tax year.
    • Foreigner’s Tax Liability: Once the tax has been properly withheld by the resident and paid to SARS, the foreign entertainer or sportsperson is no longer responsible for that specific income tax assessment, and SARS will issue them a ‘nil’ assessment (meaning they owe nothing further).

Step 6: Getting Your Certificates

• • • Tax Clearance Certificate: You can request a tax clearance certificate. This is often necessary to allow the South African commercial bank to release the remaining performance fees (after tax) to the non-resident entertainer or sportsperson.
    • Tax Credit Certificate: A tax credit certificate will only be issued once the full tax amount has been paid to SARS.