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South Africa Confirms DTA With Chile In Effect

by Lorys Charalambous, Tax-News.com, Cyprus

19 September 2016


According to a notice published on September 9 by the South African Revenue Service, the double taxation agreement (DTA) between South Africa and Chile, which was signed on July 11, 2012, went into force on August 11, 2016.

The DTA sets out the allocation of taxing rights between the two jurisdictions with regard to business income through permanent establishments, and to income from shipping and air transport.

Withholding taxes are also capped on different types of passive income. Under the agreement, the withholding tax rate on dividends is capped at five percent if the beneficial owner is a company which holds directly at least 25 percent of the capital of the company paying the dividends, or 15 percent in all other cases.

Withholding tax will not exceed five percent on the interest derived from loans granted by banks and insurance companies, and on bonds or securities traded on a recognized securities market. A 15 percent rate will apply in all other cases. The tax on royalties is capped at five percent for the use of industrial, commercial, or scientific equipment, or otherwise at 10 percent.

In addition, the DTA includes a provision for the exchange of tax information between the two jurisdictions.

TAGS: South Africa | tax | business | double tax agreement (DTA) | Chile | royalties | agreements | withholding tax | dividends | Africa

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