Double Taxation Agreement Uae and South Africa

September 21, 2023 1:21 pm Published by

Double Taxation Agreement between UAE and South Africa: An Overview

The United Arab Emirates (UAE) and South Africa have entered into a Double Taxation Agreement (DTA) to avoid the double taxation of income earned by residents of both countries. This agreement was signed on 26 May 2015 and came into force on 1 January 2017.

The DTA applies to taxes on income and gains of individuals and legal entities, as well as taxes on estates, inheritances, and gifts. The agreement also covers taxes on immovable property, including rental income and profits from the sale of property.

Under the DTA, residents of the UAE who earn income from South Africa will be taxed in South Africa, but they will receive a credit for the tax paid in the UAE. Similarly, residents of South Africa who earn income from the UAE will be taxed in the UAE, but they will receive a credit for the tax paid in South Africa.

The DTA also provides for reduced withholding tax rates for certain types of income. For example, the withholding tax rate on dividends will be reduced from 15% to 5% if the recipient is a resident of the other country and holds at least 10% of the share capital of the company paying the dividends.

The agreement also includes provisions for the exchange of information between the tax authorities of both countries. This will help to prevent tax evasion and promote transparency in the taxation of cross-border income.

The DTA between the UAE and South Africa is part of the UAE’s efforts to strengthen its economic ties with African countries. South Africa is the largest trading partner of the UAE in Africa, and the DTA is expected to further boost trade and investment between the two countries.

In conclusion, the Double Taxation Agreement between the UAE and South Africa is a significant development that will have a positive impact on businesses and individuals operating between the two countries. By avoiding double taxation and providing for reduced withholding tax rates, the DTA will encourage cross-border investment and promote economic growth.

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