Tax and SARS knowledge base
How do I complete WTR01 for royalties paid to a foreign supplier?
How do I complete and submit WTR01 for royalties paid to a foreign supplier?
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Direct answer
Complete WTR01 only after confirming that the payment is a royalty to a foreign recipient and that the relevant withholding-tax treatment has been established. SARS provides a current Guide to Withholding Tax on Royalties Return, WTR01. Use the live guide, current form and facts of the contract rather than copying a previous return.
The return process is not merely data capture. A royalty agreement can involve software, intellectual-property rights, licences, support services, bundled products, group companies and treaty claims. Separate the payment components and keep the contract, invoices, declarations and calculation available for review.
What this means in practice
Start by identifying the payer, recipient, payment date, contract and right being acquired or used. Ask whether the payment is genuinely for a royalty or partly for another service. Do not apply a reduced rate simply because the supplier is foreign or has mentioned a treaty.
The WTR01 file should reconcile to the general ledger and bank payment. The amount reported, amount withheld and date must be traceable. If a declaration is used to support an exemption or reduced rate, retain the current signed form and the evidence required by SARS.
Step-by-step
- Obtain the executed licence or royalty agreement, invoices and payment approval.
- Identify each recipient and payment component, and obtain appropriate tax advice on classification and rate.
- Check the current SARS WTR01 guide and use the current return process.
- Complete the return from reconciled records, checking taxpayer references, dates, gross amount and withholding treatment.
- Before applying an exemption or reduced rate, obtain a signed valid WTRD from the foreign recipient. The recipient gives WTRD to the withholding agent. Retain it; SARS does not require routine WTRD submission unless it requests it on review.
- Submit and pay through the current SARS channel by the applicable deadline, retaining proof.
- Reconcile SARS confirmation to the ledger and diarise any recurring obligation.
Documents and records to keep
- Licence or royalty contract and amendments.
- Supplier identity and residency evidence.
- Invoices, payment records and withholding calculation.
- WTR01, declaration evidence and SARS proof of submission.
Important limits and exceptions
The exact rate, deadline and declaration rules must be checked against current SARS material and the applicable law. A contract labelled software or service can have tax consequences that require specialist analysis.
When to get tailored advice
Get advice before payment where the arrangement is cross-border, high value, bundled, related-party, treaty-based or unclear.