In terms of section 35 A of the Income Tax Act there rests a duty to withhold tax on the sale of land belonging to a non-resident of South Africa. Where the non-resident seller is a natural person, 5% of the amount so due to him/her must be withheld, if the seller is a company 7, 5%, and if the seller is a trust, 10% must be withheld.
How does one determine whether a party is a resident or not of SA?
There are two tests
1. Ordinary resident in terms of S A common law
( - ordinarily return to SA from his wanderings – usual/ principal residence – real home)
2. Residents ito the Income Tax Act 1962 who passes the “physical presence test”
A person will be deemed to be a resident if during the year of assessment he is 1) or failing that 2)
Physical presence test (PPT) –
Individual must be physically present in SA for periods exceeding
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