Botswana South Africa Double Tax Agreement

Last week, it was reported that Botswana and South Africa had signed a new double taxation convention, which would replace the agreement signed between the two countries in 1978. Double taxation agreement with Belgium, China and Luxembourg. Malawi, Tanzania and are awaiting ratification. Discussions on possible tax treaties are taking place with the following countries: Angola, Kenya, Nigeria, Uganda and Japan. In the new agreement, the scope of an establishment has been extended to construction, assembly and/or installation, as well as personnel services. Agreement between the Government of the Russian Federation and the Government of the Republic of Albania for the Avoidance of Double Taxation of Taxes on Income and Capital, signed earlier this month by the South African Minister of Finance, Trevor Manuel, and the Minister of Financial Planning and Development of Botswana, Baledzi Gaolathe, said in a statement from the Ministry of Finance in Botswana: „The main function of the agreement is to: Remove tax barriers to bilateral trade and investment.“ The double taxation convention between Botswana and the United Kingdom was approved by the African State legislator in January 2006. The agreement was signed in Gaborone on 9 September 2005 and entered into force on 4 September 2006. A tax credit is granted unilaterally when a resident of Botswana has been taxed in another country and in cases where a double taxation agreement (DBA) has been concluded. A tax credit is also granted when income from a source has been the subject of a WHT in Botswana. The amount of the exemption is limited to the reduction of tax paid by deduction and which is normally paid on such income in Botswana. According to local media, the previous agreement was obsolete and did not provide for changes in the concept of international taxation.

The Ministry of Finance confirmed this in a statement, stating that the new DBA contains clauses relating to tax relief and addresses the tax impact of income allocation when a company carries out part of its activities in one country and part of it in the other. . Dividends are subject to a withholding tax of 5% if the company receiving such dividends holds at least 25% of the participation of the company paying the dividend and 12% withholding tax on gross amounts if the participation is less than 25%. . Date of entry into force: 1 January 2004 (Russia); 1 July 2004 (Australia). . . . Date of entry into force: 1 January 1998 (Russia); 1 April/6 April 1998 (United Kingdom). .

The same principle applies to profits from the sale of shares in a company whose assets consist essentially of immovable property located in one of the countries. . The new treaty will enter into force if it has been ratified by the parliaments of Botswana and South Africa and the two countries have informed each other of the completion of the formalities. .