SOUTH AFRICA: Withholding tax on entertainers and sportspersons in effect

The previously announced 15% withholding tax on the income of non-resident entertainers and sportspersons which was announced in the 2005 Budget and included in Revenue Act No.31 of 2005 took effect in 1 August 2006.

Event organizers, producers and others who make payments to foreign entertainers and sportspersons for performances in South Africa on or after 1 August 2006 will have to withhold a 15% tax from these payments. In order to enforce this obligation, a resident who agrees to found, organize or facilitate a performance for reward, is required to notify the South African Revenue Service (SARS) of the performance within 14 days of concluding the agreement. Where it is not possible for the withholding tax to be imposed the foreign entrepreneur or sportsperson is liable for the payment of the 15% tax.