Tax

HMRC Amends Tax Treaty With South Africa

Harriet Davies 19 November 2010

HMRC Amends Tax Treaty With South Africa

The UK tax authority, Her Majesty’s Revenue & Customs, has signed a protocol to the convention for the avoidance of double taxation the country has with South Africa, according to tax-news.

The amendment was made following a request from South Africa, which is changing its system of taxing dividends paid to non-residents through the introduction of a withholding tax, the publication reports. Due to this, the protocol amends the provisions on the taxation of dividends in the convention, setting a rate of withholding tax.

The protocol also reportedly updates the provisions dealing with the exchange of information, introducing assistance in the collection of taxes between the UK and South Africa.

The Protocol will enter into force once both countries’ legislative procedures have been completed, according to the report; however, it will only take effect in respect of dividends once South Africa has changed its system of taxation at the shareholder level.

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