ABOUT SARS DEDUCTION REGARDING ROYALTY TO NON-RESIDENTS

No deduction is allowed in respect of royalty
payments to non-residents if:
• the intellectual property was at any time wholly or partly owned by the
taxpayer or another South African resident, or
• the intellectual property was developed by the taxpayer or a connected
person who is a resident.
If the royalty is subject to a withholding tax at a rate of 10% then a deduction
of one-third of the royalty is allowed.
If the royalty is subject to a withholding tax at a rate of 15% then a deduction
of half of the royalty is allowed.

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