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Five terms to help you decode and complete your DTR2 form quick and easy

by , 17 October 2013
When your company pays out a dividend, you must withhold Dividends Tax (DT) from your shareholders' payment and pay it over to SARS. This means your company must complete and submit a DTR02 form to SARS. Here are five terms to help you decode your DTR02 form and complete it correctly.

DT is a tax imposed on shareholders when they receive their dividends.

"You can't afford to make a mistake when declaring the dividends, paying them out, or taxing them. If you make an error, you could be found guilty of tax evasion and face a 200% penalty," warns the Practical Tax Loose Leaf Service.

To help you complete the DTR2 form quickly and easily, the Loose Leaf Service gives you a definition of the five terms you'll see on the form.

Here are the definitions of the five terms you'll see on the DTR2 form

#1: Submitting entity - This is the entity that's registered for dividends tax and the entity that must submit information and payments to SARS.

#2: Entity received from - The company that declares and issues the dividend.

#3: Dividend recipient - The person getting the dividend.

#4: Dividends tax number - This is the income tax reference number of the taxpayer or the entity.

#5: Payment reference number (PRN) - This number appears on the DTR2. If you submit a payment to SARS, you MUST use this number so SARS can allocate your payment correctly. If you don't, SARS assumes you haven't made the payment and will penalise you.

Remember SARS scrutinises DT. Knowing the meaning of these terms will help ensure you complete your DTR2 form correctly.

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