The Double Taxation Relief and International Tax Enforcement (South Africa) Order 2011

Made: 12th October 2011

At the Court at Buckingham Palace, the 12th day of October 2011Present,The Queen’s Most Excellent Majesty in Council

Accordingly, Her Majesty, in exercise of the powers conferred upon Her by section 2 of the Taxation (International and Other Provisions) Act 2010 and section 173(1) to (3) of the Finance Act 2006, by and with the advice of Her Privy Council, orders as follows—

Citation

1

This Order may be cited as the Double Taxation Relief and International Tax Enforcement (South Africa) Order 2011.

Double taxation and international tax enforcement arrangements to have effect

2

It is declared that—

• (a) the arrangements specified in the Protocol set out in the Schedule to this Order, which amend the arrangements set out in the Schedule to the Double Taxation Relief (Taxes on Income) (South Africa) Order 2002[^f00003], have been made with the Government of the Republic of South Africa;

• (b) the arrangements have been made with a view to affording relief from double taxation in relation to income tax, corporation tax, capital gains tax and taxes of a similar character imposed by the laws of the Republic of South Africa and for the purpose of assisting international tax enforcement; and

• (c) it is expedient that those arrangements should have effect.

SCHEDULE

Signed

Judith Simpson — Clerk of the Privy Council

Explanatory note

(This note is not part of the Order)

EXPLANATORY NOTE

The Schedule to this Order contains a Protocol (“the Protocol”) which amends a convention between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the Republic of South Africa for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income and on Capital Gains (“the Convention”). The Convention was scheduled to the Double Taxation Relief (Taxes on Income) (South Africa) Order 2002 (S.I. 2002/3138). This Order brings the Protocol into effect.

The Convention aims to eliminate the double taxation of income or gains arising in one country and paid to residents of the other country. It does this by allocating the taxing rights that each country has under its domestic law over the same income and gains, and/or by providing relief from double taxation. It also has specific measures which combat discriminatory tax treatment and provide for assistance in international tax enforcement.

The Protocol continues this approach by updating the exchange of information Article (Article 25) in the Convention to bring it into line with the new international standard for exchange of information as set out in Article 26 of the Model Tax Convention on Income and on Capital published by the Organisation for Economic Cooperation and Development (“OECD”). The Protocol also amends paragraph (1) of Article 3 (General Definitions) by providing definitions for “property investment company” and “qualifying dividend”, updates Article 10 (Dividends) to reflect changes in the laws of the Republic of South Africa concerning the taxation of dividends and inserts Article 25A, which provides for the assistance in the collection of taxes.

Article 1 provides for citation.

Article 2 makes a declaration as to the effect and content of the arrangements specified in the Protocol.

The Protocol will enter into force on the date of the later of the notifications by each country of the completion of its legislative procedures. It will take effect as follows:

• (a) in relation to Article I, from the date of entry into force;

• (b) in relation to Article II, in respect of amounts paid or credited on or after the date of the introduction in the Republic of South Africa of the system of taxation at shareholder level of dividends declared;

• (c) in relation to the information referred to in Article III, in respect of such information that is requested or exchanged on or after the date of entry into force; and

• (d) in relation to revenue claims referred to in Article IV, in respect of requests for assistance made on or after the date of entry into force.

The date of entry into force will, in due course, be published in the London, Edinburgh and Belfast Gazettes.

In line with government commitments, a Tax Information and Impact Note has not been prepared for this Order as it gives effect to a previously announced policy to enact a double taxation agreement.

Footnotes

[^f00001]: 2010 c. 8.

[^f00002]: 2006 c. 25.

[^f00003]: S.I. 2002/3138.