Protocol Amending Cyprus-South Africa Double Tax Agreement Signed

Introduction

On April 1 2015 Cyprus and South Africa signed a protocol amending their existing double tax agreement, which was signed in 1997 and has been in force since December 8 1998.

The protocol amends the following areas of the 1997 agreement:

• the definition of 'residence';
• withholding taxes on dividends; and
• the exchange of information.

However, the protocol does not change the highly beneficial arrangements regarding the taxation of capital gains.

Residence

The protocol aligns the definition of a 'resident of a contracting state' with the 2010 Organisation for Economic Cooperation and Development (OECD) Model Convention.

Taxation of dividends

The 1997 agreement exempts dividends paid by a company in one country to a recipient in the other from withholding tax in the first country, as long as the recipient is the beneficial owner of the dividends.