Dual-listed shares:

how to claim tax refunds

When investing offshore, South Africans are typically subject to foreign DWT, which is deducted at source by the foreign tax authority. This means the dividend is taxed before reaching the investor, with rates varying by jurisdiction – usually ranging from 5% to as much as 35%. The same principle often applies to dividends from foreign companies listed on the Johannesburg Stock Exchange.

In the case of dual-listed shares – companies listed on more than one exchange, such as Richemont and Anheuser-Busch InBev – investors can face double taxation, where both the country of listing and the country of incorporation apply DWT. While double taxation agreements (DTAs) between jurisdictions aim to prevent this, in practice, excess tax is still frequently withheld. Where the rate of DWT exceeds the threshold permitted under a relevant treaty, investors are entitled to claim a refund from the foreign tax authority.

Take Swiss companies, for example: dividends are typically subject to a flat 35% DWT, regardless of the investor’s South African tax position or the DTA in place between South Africa and Switzerland. South African exemptions – such as those for pension funds or domestic companies – do not apply in the foreign jurisdiction. As a result, excess tax may be withheld unnecessarily. The good news: investors can reclaim this amount, provided the correct documentation is submitted.

Case study: Richemont

Consider Richemont shares, which trade on both the SIX Swiss Exchange and the JSE. Dividends paid on these shares are subject to Swiss DWT at a statutory rate of 35%. Because the shares are also listed locally, the dividend is further subject to South African DWT at 20%, unless the shareholder qualifies for a South African exemption (for example, a domestic company).

In accordance with the tax treaty between Switzerland and South Africa, South African shareholders are generally subject to a maximum Swiss DWT rate of 15%. However, in practice, the outcome for a South African shareholder (who does not qualify for an exemption from South African DWT) is as follows:

• Swiss DWT: 35% is withheld. The shareholder can, however, claim back 20%, reducing the effective Swiss tax to 15% in accordance with the treaty.
• South African DWT: SARS levies a 5% tax, calculated as the domestic rate of 20% minus the 15% already allocated to Switzerland under the treaty.

If the shareholder fails to lodge the refund claim with the Swiss tax authority, the effective tax burden on the dividend rises to 40% – significantly above the intended treaty rate.

Case study: Porsche AG

Foreign direct shares refer to equities held on offshore exchanges, such as Apple, Microsoft, Nestlé and various other global giants. A relevant example is Porsche AG, listed on the German stock exchange. Dividends paid to South African investors in Porsche are subject to German DWT of 25%, plus a 5.5% solidarity surcharge applied to the base tax. This results in a total effective withholding rate of 26.375%.

Under the DTA between South Africa and Germany, South African tax residents should only be subject to a maximum withholding tax of 15%. However, this preferential rate is not automatically applied: the full 26.375% is withheld at source.

From a local tax perspective, SARS permits an income tax credit only up to the treaty rate of 15%. Without taking further action, this leaves the investor facing double taxation unless they submit a reclaim for the excess 11.375% withheld by the German revenue authority – a material drag on net returns.

An onerous process

While reclaiming excess DWT may appear straightforward in principle, the actual process is anything but. Submitting a successful claim often requires extensive documentation. Many tax authorities still require original hard-copy documents, submitted by post, often in prescribed formats and within strict time limits. As a result, the majority of non-institutional shareholders generally forfeit these refunds – which can, over time, run into thousands of rands.

In 2025, the landscape has become even more challenging. Several jurisdictions have tightened compliance frameworks significantly. German authorities, for example, now demand robust proof of beneficial ownership and economic substance before granting treaty relief. This reflects a broader EU trend aimed at curbing treaty abuse and enforcing substance-over-form principles in tax regulation.

These developments underscore a critical point: reclaiming excess DWT is a highly regulated process that requires precision, persistence and technical expertise. For investors seeking to optimise offshore returns, a structured and proactive approach is essential.

Our partnership with GTR

To help simplify the often complex process of reclaiming excess DWT, Sanlam Private Wealth has partnered with specialist tax recovery provider GTR. Through this partnership, our clients are able to access international tax relief on a broad range of dual-listed and foreign direct shares, ensuring they recover what they are entitled to – without the administrative burden.

By leveraging GTR’s deep expertise in navigating international tax treaties and regulatory requirements, our clients benefit from a streamlined, cost-effective process designed to optimise after-tax investment returns across both local and global portfolios.

There is no additional fee from Sanlam Private Wealth for this service. GTR charges a fee of 20% on any refund successfully recovered. No fee applies to unsuccessful claims, and there is no minimum charge.

To activate this service, simply complete a short authorisation form available from your portfolio manager. Once submitted, no further action is required from you unless a tax authority specifically requests supporting documentation. Any refunds (net of cost) will be deposited directly into your Sanlam Private Wealth trading account upon receipt.

Please note: you may appoint only one recovery service provider. If you already have an existing DWT recovery arrangement in place, the GTR service will not be available.

If you have any questions or wish to enrol, please contact your portfolio manager.