Tax and SARS knowledge base

When must withholding tax on royalties be paid to SARS?

Last reviewed: 28 August 2026

Direct answer

SARS says withholding tax on royalties must be paid before the end of the month following the month in which the royalty was paid. The withholding agent must submit a WTR01 return with the payment. Where that last calendar day is a weekend or public holiday, SARS says payment must be made on the last business day before it.

This is a payment-and-return deadline. It does not decide whether a payment is a royalty, whether the recipient is a foreign person, or whether an exemption or treaty rate applies. Those questions should be resolved before money is released, not after the deadline has arrived.

What this means in practice

Withholding Tax on Royalties applies to an amount of royalty paid to, or for the benefit of, a foreign person from a South African source. SARS says the foreign person is liable for the tax, while the person making the payment must withhold it. Its current public page states a final withholding-tax rate of 15%, subject to a valid exemption or reduced rate.

Start with the payment date, not merely the invoice date. A payment made during April normally has a deadline before the end of May. Record the contractual payment date, actual value date, recipient, gross royalty, currency, tax withheld and basis for any relief in one reconciled schedule. That schedule should agree to the WTR01 and accounting records.

The payer should also distinguish a royalty from a wider commercial invoice. SARS describes royalties by reference to intellectual-property use or rights, relevant knowledge or information, and services connected with applying that knowledge. A software, technology or licensing contract can contain several elements. Do not treat a label on an invoice as conclusive where the contract is mixed or material.

Step-by-step

Review the agreement and payment instruction before payment. Identify the recipient, payment month, gross amount, currency and why the payment is considered a royalty.

Check whether the foreign person supplied a valid WTRD before payment. SARS says the declaration is provided to the withholding agent, not routinely sent to SARS. Keep it for five years and check it supports the exemption or treaty rate actually used.

Calculate the amount to withhold. Where no valid declaration supports relief, do not assume a treaty rate. SARS's WTR01 guide says the taxpayer remains responsible for ensuring that the correct rate is used.

Complete WTR01 for the relevant monthly period. SARS says the form records the period in YYYY/MM format. Reconcile the recipient and payment details before signing and dating the return.

Make sure the entity is activated for Withholding Tax on Royalties in eFiling. SARS says a WTR payment cannot be made until that tax type is activated.

In eFiling, use Additional Payments, create a payment, select Withholding Tax on Royalties and capture the amount declared on WTR01. Check the payment period and amount before confirming.

Authorise the generated payment request in the relevant online-banking system. Creating a request in eFiling does not by itself release bank funds. Retain both the eFiling confirmation and bank proof.

Complete the return-and-payment process before the applicable deadline. If month-end is a weekend or public holiday, work backwards to the last business day. Avoid leaving approval, banking limits or signatories to the last afternoon.

Documents and records to keep

Executed royalty, licence or services agreement and relevant invoices.
Payment dates, foreign-recipient details and currency-conversion working where applicable.
WTRD and any evidence relied on for an exemption or reduced rate.
Completed WTR01, eFiling confirmation, banking proof and reconciliation.
Correspondence about queries, corrections or refund claims.

SARS says the withholding agent may be asked to provide the WTRD on review. Keep a complete record that shows what was paid, what was withheld and why. Do not upload sensitive documents through unverified links or send them to an address not listed in a current SARS guide.

Important limits and exceptions

The end-of-following-month rule does not cure an incorrect tax treatment. A reduced DTA rate, exemption and the correct treatment of a payment depend on facts and documentation. SARS says a WTRD must be delivered to the withholding agent before relief is applied. If it is absent or invalid, obtain advice before assuming a lower rate.

SARS's current guidance says WTR payments are made through eFiling. Its WTR01 guide also says a bank authorisation is needed after the eFiling request. A payment may therefore fail operationally even where the calculation is correct, for example because the tax type was not activated or a bank approver did not release it.

When to get tailored advice

Obtain tax advice before payment where an agreement includes software, know-how, technical services or multiple rights; the payee has a South African permanent establishment; a treaty rate is proposed; or the payment is significant. Get help promptly if the due date has passed, the WTR01 does not reconcile, or a valid declaration arrived only after payment.