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South Africa, Seychelles DTA Protocol Comes Into Effect

by Lorys Charalambous, Tax-News.com, Cyprus

13 June 2012


It has been announced that the protocol to the existing double taxation agreement (DTA) between South Africa and the Seychelles has been ratified and went into effect on May 15, 2012.

In particular, the protocol, which was signed on April 4, 2011, updates the DTA to reflect the introduction of the South African dividends tax, which has replaced the secondary tax on companies from April 1 this year, and is being levied at a rate of 15% on shareholders.

However, for residents of the Seychelles receiving dividends from South African companies that rate will be 5% of the gross amount of the dividends if the beneficial owner is a Seychelles company which holds at least 10% of the capital of the company paying the dividends; or 10% of the gross amount of the dividends in all other cases.

The protocol also incorporates the internationally-agreed standard for the exchange of information for tax purposes into the existing DTA.

The new protocol will apply to “taxes of every kind and description” imposed in either country, and will give the tax authorities of both countries a greater ability to exchange taxpayer information. It provides that neither tax authority can refuse to provide information solely because it does not require the information for its own domestic purposes, or because the information is held by a bank or similar institution.

TAGS: South Africa | tax | investment | business | double tax agreement (DTA) | law | agreements | legislation | withholding tax | dividends | legislation amendments | Seychelles | Africa

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