The earlier convention was ratified in the Netherlands, but not in South Africa, and because of an amendment of the tax law in South Africa, the government requested an amendment of the tax convention.

The government of the Netherlands accepted South Africa’s request for renegotiation of the convention. As a result of the renegotiations South Africa and the Netherlands have concluded the most recent protocol.

The convention concerns taxes on income and on capital gains, and is intended to avoid double taxation. In addition, the convention is intended to prevent fiscal evasion and to provide for an exchange of fiscal information.

It replaces the old tax convention of 1971, and improves the conditions for investment in both South Africa and the Netherlands.

According to the Dutch Finance Ministry:

"The most important benefits for the Netherlands are no withholding tax on interest, a source state taxation on pensions, including lump sum payments, an arbitration clause and a residence provision for pension funds. A 5% withholding tax on participation dividends and a 10% withholding tax on portfolio dividends is applicable. Furthermore, an extended article on exchange on information and on assistance in recovery in conformity with the OECD Model Convention 2005 has been inserted."

"As a result of the signing of this protocol the tax convention can be ratified in South Africa as well. The protocol has yet to be submitted for parliamentary ratification in the Netherlands."

The Netherlands is currently the fifth largest destination of South African exports. South Africa is the main trading partner of the Netherlands in Africa, with exports totalling EUR1.6bn in 2007.