The amended South African Tax Act is now fully applicable from 1 March 2020. If you have international economic interests, your income may be taxable both in South Africa and abroad, resulting in double taxation. A widespread misunderstanding we see among South African expats is that they think they are “automatically exempt” simply because there is a double taxation treaty between the two countries. This is completely false and there are several factors that must be considered and demonstrated objectively, and you are still legally required to file a tax return and “claim” an exemption as part of the contract relief. Double taxation treaties (“DBA”) are internationally agreed laws between South Africa and another country. South Africa has dozens of such agreements with different countries and the main purpose of a DBA is to ensure that each country subject to the agreement knows what its tax rights are vis-à-vis taxpayers. Depending on where a taxable person is established as a tax resident, it is established, taking into account the DBA, where the taxable person must pay certain types of tax on the income received. In 1995, the OECD amended the text of Article 3(2) to insert the phrase “on that date”. As explained in paragraph 11 of the commentary on Article 3(2), this amendment expressly preferred the definition of terms which are not defined in the DBA on the basis of the law `applicable when the Convention is applied, i.e. when the tax is introduced`. That is why the amendment approved the outpatient approach. The priority objective and objective of a tax treaty in the preamble is to avoid international legal double taxation aimed at facilitating international trade and to allocate taxation rights among States parties. The preamble to the 2019 version of the OECD Model Convention has been extended to exclude from the scope of a treaty the possibility of not imposing or imposing reduced taxation through tax evasion or avoidance.

However, the interpretation of the tax treaty must never lose sight of the purpose and purpose of the treaty, an unfortunate issue that involves the interpretation of the intent of the tax treaty, its conditions, etc., using various primary and secondary instruments. Our multidisciplinary team of more than 120 professionals, including tax lawyers, tax advisors, accountants (SA) and emigration specialists, takes care of the entire DTA application process on your behalf. This involves assessing one`s own circumstances and the DBA applicable to them, and then drafting a report on the tax legislation that will clarify precisely where one falls with regard to the tax liability. The notice can be used in combination with an argument in favor of SARS if it does not agree with your tax position as a non-tax resident within the meaning of a DBA….