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The South African Revenue Service (SARS) has issued a revised binding general ruling (BGR) that identifies the taxes administered by the agency that constitute taxes on income for the purposes of South Africa's double taxation agreements (DTAs).
SARS has pointed out that a DTA generally provides for relief for specified taxes that are in existence at the time the tax treaty is entered into; and any identical or substantially similar taxes on income that are imposed after the date the treaty is signed – in addition to, or in place of, existing specified taxes.
It is considered that, at the date of the BGR, all of the following taxes qualify for treaty relief under South Africa's DTAs: the normal tax on taxable income (which includes taxable capital gains); withholding tax on royalties; withholding tax on interest (which came into effect for interest payable on or after March 1, 2015); tax on foreign entertainers and sportspersons; turnover tax on micro businesses; secondary tax on companies (on dividends declared before April 1, 2012); and dividends tax (on dividends declared and paid on or after April 1, 2012).
SARS has also given a non-exhaustive list of the taxes that are not considered taxes on income or similar taxes, and therefore do not qualify for treaty relief, including customs and excise duties, diamond export levy, donations tax, estate duty, royalties levied on mineral resources, skills development levy, and value-added tax.
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