South Africa And Malaysia Sign Double Taxation Avoidance Agreement

by Robert Lee, Tax-News.com, London

28 July 2005

The governments of South Africa and Malaysia have signed a new double taxation avoidance agreement as both countries agree to a joint investment and trade initiative to expand bilateral trade and investment opportunities.

Speaking to BuaBuaNews, Finance Minister Trevor Manuel, who signed the tax agreement with Malaysian Minister of International Trade and Industry Ms Rafidah Aziz, explained that South African firms investing in Malaysia will still be taxed, but will not be taxed by both taxing authorities.

"We said with the Malaysian government that Malaysian companies that invest in SA will be taxed in Malaysia and South African companies that invest in Malaysia will be taxed there," Manuel explained.

"And so, it's just ensuring that in either case government will get its fair share of taxation deal...it's a very sound principle it's also based on the premise that you won't be taxed twice but nonetheless you will be taxed," he added.

The double tax deal will act as a precursor to the establishment of a new investment committee, to be known as the Malaysia-South Africa Trade and Investment Committee, the aim of which is to promote increased levels of trade and investment between the two countries.

Malaysia is the fifth largest investor in South Africa and total trade between the two countries increased to US$800 million last year from US$10.4 million in 1993.

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