The Diplomatic Society

 
  • Increase font size
  • Default font size
  • Decrease font size

SA-Mauritius tax treaty comes into force

19 June 2015

Pretoria - Government has gazetted the South Africa-Mauritius tax treaty which came into force at the end of May, said National Treasury.

“This new treaty reflects changes in the tax policies of the two countries and is in line with international best practices to deal with tax abuse as outlined in the Organization for Economic Cooperation and Development (OECD) Model Tax Convention. The new treaty deals inter alia with the treatment of dual residence for persons other than individuals and withholding taxes on interest and royalties,” said National Treasury on Thursday.

The tax treaty, which came into force on 28 May, was gazetted on Wednesday. It replaces the 1996 South Africa-Mauritius tax treaty.

In November 2009, the two countries started renegotiations for the new tax treaty with the renegotiations being finalised, in January 2011. The main driver for the renegotiation of the old tax treaty was to curb abuse of the old treaty.

The new treaty was signed by the two countries on 17 May 2013. The South African Parliament ratified the new treaty on 14 September 2013. Mauritius notified South Africa of its ratification of the new treaty on 28 May 2015.

The main changes to the old tax treaty include a revised test for dual residence for persons other than individuals; withholding taxes on interest and royalties; capital gains tax; removal of tax sparing provision and assistance in tax collection.

When coming to dual residence for persons other than individuals the tie-breaker clause in the new tax treaty, in Article 4(3), follows the alternative test under paragraph 24.1 of the Commentary to the OECD Model Tax Convention. It provides that the Competent Authorities of the Contracting States shall, in any case where a person other than an individual is a resident of both States, endeavour to settle the question by mutual agreement and determine the mode of application of the Agreement to such person.

In order to provide greater certainty to the small number of companies that may be affected by the change, South Africa and Mauritius have signed a Memorandum of Understanding (MoU) which sets out the factors that the two competent authorities will take into account in deciding the country of residence.

The MoU draws on the guidance provided in commentaries to the OECD and UN Model Tax Conventions, as well as the ongoing Base Erosion and Profit Shifting (BEPS) initiative work, so its approach will be familiar to multinational enterprises.

– SAnews.gov.za

 


 
 
 
 
 
 
 
 
 
 
 
 
 
_________________________________________________

February/March 2020

 
 
.
_________________________________________________

Translater


 

 

 

  
 
 
 
 

 
 
                                                     
 
 
 
 
 
 
 

 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
 

 
 
 
 
 
 
 
 
 
 
 
 

<|> <|> Indonesian Tourism responds to Millennials and wins Award 8 October 2019 "The challenge to the tourism world is not getting easier. It is not only the global economic slowdown, but also a change in... <|> A MEMORIAL, CORONATION, ENGAGEMENT AND A WEDDING: A ROYAL AFFAIR by Stella Sigcau 15 October 2019 September and October months were very busy in the royal calendars throughout South Africa... <|> Culture and Heritage Tourism Boost the Economy of the Mpondo Kingdom Mbotyi and Mngazi 15 October 2019 By Stella Sigcau Mpondo Kingdom is known for its cultural richness, beautiful... <|> SADC enhances cooperation with Indonesia 15 October 2019 ”Indonesia is ready to be part of the African development, especially in the southern African region” Photo: Ambassador of the Republic... <|> A rising star ready to make it internationally by Stella Sigcau 16 October 2019 Azemahle Lwanda Matebese a 13 year old, grade 8 scholar from Durban Girls High School has had a passion for dancing... <|> Korea calls for ease of doing business in SA 2 October 2019 This year marks Korea’s 4,352nd anniversary since its national foundation, and the 71st anniversary of its Armed Forces Day. In South... <|> Russia-Africa look to deepen scientific ties 14 October 2019 With a week to go until the first ever Russia-Africa Summit, Russia has emphasised the need to expand and deepen scientific ties between... <|> SA, Nigeria commit to condusive business environment 4 October 2019 The governments of South Africa and Nigeria have committed to creating a conducive business environment that will make it easier... <|>
© copyright 2011-2017| The Diplomatic Society| All Rights Reserved.