Tax and SARS knowledge base

Can I claim foreign withholding tax on dividends?

Last reviewed: 28 August 2026

Direct answer

You cannot assume that foreign withholding tax on a dividend is automatically refundable, fully creditable or deductible in South Africa. First identify and declare the foreign dividend correctly. Then retain evidence of the actual foreign tax paid or withheld and obtain tailored advice if the amount is material, a treaty rate may apply or the records are unclear. Foreign withholding affects the cash you received, but it does not by itself answer the South African treatment. The gross dividend, foreign tax, currency, country and ownership facts should be recorded separately.

What this means in practice

Many broker reports show only the net cash deposited. That is not enough for a robust tax reconciliation. You need to know the gross dividend declared, foreign tax withheld, any fee deducted and the net amount. A brokerage fee is not foreign withholding tax, and a country label on an account is not proof of the tax authority that received the amount. Foreign tax may be withheld under the payer country's domestic rules. A double-taxation agreement may affect the rate a qualifying person can obtain, but treaty application is fact-specific. It can require residency declarations submitted to the withholding agent in time. It is not a reason to manually reduce the dividend amount in an ITR12. The South African ITR12 distinguishes investment-income categories. Complete the foreign-dividend information from the correct source records. Keep any foreign-tax support with the return even where it is not prepopulated.

Step-by-step

Gather source documents.

Download dividend advices, annual broker tax reports and withholding certificates. A report should identify the issuer, payment date, gross dividend, tax withheld and currency.

Reconcile each payment.

Match the advice to the cash received. Explain the difference between gross and net with a line for tax and a line for fees where applicable.

Confirm ownership and country facts.

Record the account holder, beneficial owner, payer country and any treaty documentation submitted. Do not rely on a generic platform summary if issuer-level detail is available.

Convert amounts carefully.

Keep your rand conversion calculation and evidence. Apply the current SARS return approach, not a rate copied from an earlier year.

Complete the foreign-dividend return fields.

Use the current ITR12 guide. Do not move foreign tax into a random expense field or leave a foreign dividend out because a foreign bank already withheld tax.

Escalate material claims.

If you intend to claim relief, have the calculation reviewed against current legislation, the relevant treaty and the supporting certificate before submission.

Documents and records to keep

Foreign dividend advices and broker annual tax reports.
Certificates showing tax withheld and payer details.
Tax-residency declarations and treaty documents where used.
Currency conversion schedule and proof of share ownership.
Filed ITR12, ITA34 and SARS correspondence.

Important limits and exceptions

Foreign tax relief is not a blanket cash refund. The amount potentially available can be limited, and the result depends on the income, foreign tax, return year and facts. Different rules can apply to dividends from foreign companies, foreign-listed shares, funds, employment share arrangements or amounts received through a trust. Do not use this guide to decide a treaty rate, residence certificate requirement or significant shareholding case. Do not claim an amount that was refunded by the foreign authority, charged as a broker fee or merely estimated from a net payment.

When to get tailored advice

Get tailored advice when foreign withholding tax is material, several countries are involved, treaty documentation was not filed, your shareholding is significant or the dividend was paid through a trust or employee share plan. TaxProof can help build a reconciliation schedule for professional review.