Sell your Music

Why Independent Artists Must File Taxes with SARS When Receiving Royalties

As an independent South African artist, every royalty payment your distributor sends you — whether from Spotify, Apple Music, YouTube, radio airplay, or a licensing deal — counts as income in the eyes of the South African Revenue Service (SARS).

Many artists think, “I’m small; SARS won’t care,” but ignoring your tax obligations can lead to penalties, lost credibility, and missed financial opportunities. Understanding your tax responsibilities helps you treat your artistry as a sustainable business.

1. Why You Must File Taxes on Royalties

Royalties = Taxable Income

Under the Income Tax Act (No. 58 of 1962), royalties form part of your gross income. If your total annual income (including royalties, gigs, and creative projects) exceeds the tax threshold, you are required to declare it to SARS.

Tax thresholds for the 2025 tax year:

  • Under 65 years: R95,750
  • 65–74 years: R148,217
  • 75 years and older: R165,689

Provisional Tax for Independent Artists

Because you earn non-salaried income, you must register as a provisional taxpayer. This means submitting two income estimates (IRP6 forms) — one in August and another in February — to avoid a lump-sum payment or late penalties later.

Withholding Tax on Foreign Royalties

If your royalties come from international distributors (like Spotify or YouTube), they may be classified as foreign income. South Africa applies a 15% withholding tax on royalties paid to or from foreign sources, unless a Double Taxation Agreement (DTA) specifies otherwise.

For more information, consult SARS’s “Guide to Withholding Tax on Royalties Return (WTR01)”.

Deducting Legitimate Business Expenses

Declaring your royalties correctly gives you access to legal tax deductions. You can deduct costs such as:

  • Studio hire or equipment purchases
  • Music video production or promotional expenses
  • Travel and accommodation for performances
  • Marketing, PR, or management services

These deductions reduce your taxable income — meaning you pay less tax while staying compliant.

Avoid Penalties and Audits

Failing to declare royalties can trigger SARS audits, penalties, and interest charges. Compliance ensures peace of mind and keeps your financial record clean.

Boost Your Professional Credibility

Tax compliance shows that you treat your artistry like a business. Clean records also make it easier to apply for government funding (NAC, NFVF, DSAC), grants, or business loans.

2. Step-by-Step: How to File Taxes on Royalties

Register for a Tax Number

Visit a SARS branch or register online via SARS eFiling.

Set Up Your SARS eFiling Profile

This enables you to submit returns and make payments online. SARS provides easy video tutorials on their website.

Register as a Provisional Taxpayer

On eFiling: Tax Types → Manage Tax Types → Provisional Tax (IRP6).

Track Your Income and Expenses

Keep invoices, receipts, and royalty statements.

Use tools like Excel, Wave Accounting, or QuickBooks Self-Employed.

File Your Annual Return (ITR12)

Declare total income (royalties + other earnings), apply your deductions, and submit via eFiling.

File Withholding Tax (if applicable)

If you receive income from abroad, file using WTR01.

Pay On Time

31 August: First Provisional Return

28/29 February: Second Provisional Return

October: Final ITR12 submission

Useful Resources