A flat tax rate of 15% has been introduced with effect from 1st January 2021and applies to royalties derived by individuals in their capacity as authors of qualifying literary work by virtue of their title to the copyright on that work conferred by the Copyright Act.
The 15% tax is optional and is calculated on the gross royalty income whereas no deductions areallowed. The tax is final, wherein no set-off or refund will be possible and the recipient must report such income and settle the respective tax by 30th April of the following year.
For the application of this rule, ‘qualifying literary work’ is defined as a publication which bears an ISBN and which is a novel, story, poetical work, text book, treatise, history, biography, encyclopaedia or dictionary that is eligible for copyright in terms of the Copyright Act.