AUSTRALIA MODERNISES TAX TREATY WITH SOUTH AFRICA

Australia and the Republic of South Africa have signed a new Protocol to revise the tax treaty between the two countries which was signed in 1999. The Protocol was signed by Australia’s High Commissioner in South Africa, H.E. Mr Philip Green AOM and the acting Minister of Finance in South Africa, the Hon Ms Geraldine Fraser-Moleketi in South Africa recently.

"The Protocol updates the taxation arrangements between Australian and South Africa which will enhance Australia’s relationship with South Africa by further assisting trade and investment flows," the Assistant Treasurer, Chris Bowen said.

"The Protocol aligns withholding tax rate limits for dividends, interest and royalties and capital gins tax treatment more closely with Organisation for Economic Cooperation and Development (OECD) practice."

The Protocol addresses Australia’s ‘most favoured nation’ obligation in the existing treaty by inserting rules to protect taxpayers of one country operating in the other country from tax discrimination. It also extends the scope of the existing exchange of information provisions to conform with modern OECD standards and introduces measures which provide for cross-border collection of tax debts.

The Protocol will enter into force when both countries advise that they have completed their domestic requirements. Legislation for this purpose will be introduced in the Australian Parliament as soon as practicable.

Copies of the new Protocol are available on the Treasury's website.

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