Taxing foreign sport players, entertainers

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The tax imposed on the sportsperson is a final tax and is levied at a rate of 15% on all amounts received by or accrued him or her for participating in the sports event. The tax must be paid by the foreign sportsperson within 30 days after the receipt or accrual of the amount for the performance. Payment must be accompanied by a return (NR01) that is prescribed by the Commissioner.

While the liability for the tax is placed on the foreign sportsperson, it is the South African resident making payment to the sportsperson who must withhold from that payment the amount of tax for which the foreign person is liable. If a South African resident fails to withhold the tax, that resident may become personally liable to pay it over to the Commissioner. Liability of the foreign sportsperson is discharged when the tax is withheld by the resident or recovered from the resident, who failed to withhold the tax.

If any amount deducted or withheld by a resident is denominated in foreign currency, the amount must be translated into South African Rands at the spot rate on the date on which that amount was so deducted or withheld.

Any South African resident who is primarily responsible for founding, organising or facilitating a sports event in South Africa where there will be foreign persons competing for reward, must notify the Commissioner within 14 days after agreeing to do so. The Commissioner may ask for additional information on the event which must then be provided to him.

South African event organisers and sponsors of foreign sportspersons are not the only persons who must be aware of these tax provisions, as they also apply to foreign entertainers performing in South Africa.