South Africa's DTAs With Mexico, Rwanda Become Effective

by Lorys Charalambous, Tax-News.com, Cyprus

01 September 2010

The bilateral double taxation agreements (DTAs) completed by South Africa with Mexico and Rwanda have both been passed by parliament and entered into force recently, the South African Revenue Service announced on August 31.

The DTA with Mexico, which was signed on February 19, 2009, became effective on July 22, and will apply to all taxes after January 1, 2011. Those taxes in Mexico are the federal income tax and the business flat rate tax, while the South African taxes subject to the agreement are the normal tax, the secondary tax on companies, the withholding tax on royalties and the tax on foreign entertainers and sportspersons.

The DTA with Rwanda, which was signed on December 5, 2002, became effective on August 3, and will also apply to all taxes after January 1, 2011. The subject taxes in Rwanda are the direct taxes on profits and professional income and any withholding tax‚ prepayment or advance payment with respect to those taxes, while the South African taxes are as in the DTA with Mexico, minus the tax on foreign entertainers and sportspersons.

Both agreements also cover the profits arising from shipping and air transport operations; the taxation of dividends, interest, royalties, capital gains and pensions; and the exchange of tax information.

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