Revised South Africa-Netherlands DTA Enters Into Force

by Ulrika Lomas, Tax-News.com, Brussels

14 January 2009

The revised tax treaty between the Netherlands and South Africa came into force on January 1, 2009. The new treaty replaces the existing treaty of 1971 and improves the conditions for the investment climate for Dutch enterprises investing in South Africa and vice versa.

A withholding tax rate of 5% applies to dividends in case of a participation of 10% or more (under the former treaty, the participation requirement was 25%). For other dividends, a withholding tax rate of 10% applies (this was 15% under the former treaty). No withholding tax will be levied for interest (this was 10% under the former treaty).

The new treaty applies to taxes on income and capital and is meant to avoid double taxation and facilitate the exchange of tax information. It also offers the opportunity for mutual consultation procedures in disputes with regard to the application or interpretation of the treaty.

The English text of the new treaty between South Africa and the Netherlands was published in ‘Tractatenblad (Treaty Series) 2006, 6’. The treaty was later amended by a protocol (before it became in force). The amendment protocol was published in ‘Tractatenblad 2008, 147’.

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