South Africa and United Arab Emirates sign new Income Tax Treaty

On the 23rd November 2015, a new Income Tax Treaty was signed between South Africa and the United Arab Emirates (UAE).  The treaty generally follows the OECD Model (2008).
The maximum rates of withholding tax are:
  • 10% on dividends and 5% if the beneficial owner is a company the capital of which is wholly or partly divided into shares which holds directly at least 10% of the capital of the company paying the dividends. In addition, an exemption applies to dividends paid to the government of the other contracting state or political subdivision or local authority thereof;
  • 10% on interest with some exemptions; and
  • 10% on royalties
South Africa applies the ordinary credit method to avoid double taxation, whereas the United Arab Emirates provides for the exemption method.
The treaty specifically looks at effective management to identify where taxation takes place.
Should you require further information then please contact:
Daniel Romburgh |
Telephone: +230 650 4030