Company Announcement - The Honourable Minister Sudarshan Bhadain, Mauritian Minister of Financial Services, Good Governance and Institution Reforms will address delegates at the Corporate Offshore Investment Mauritius 2015 conference next week, on issues relating to recent developments on the Double Tax Agreement between Mauritius and South Africa. Taking advantage of the financial benefits of the DTA, many corporates have established Mauritius as their financial centre for business expansion into Africa, and there is a good chance that the long awaited amendments to the DTA will soon be ratified.

Ratification of the DTA could see clarification on Article 4 of the Mutual Agreement Policy which talks to taxation on residency status.
There is hope that the Organisation for Economic Co-operation and Development’s Mutual Agreement Policy proposal will be adhered to in order to resolve current disputes surrounding Article 4.

Current amendments due for ratification between South African and Mauritian authorities include mutual agreement on the “place of effective management”; inclusion clause on the “furnishing of services through employees" and “the performance of professional services or other activities of an independent character” in the expansion of source-based taxation with the enlargement of the treaty concept of permanent establishment; elimination of capital gains tax relief in one state on the disposition of shares held by a property-rich company located in the other state; increases in withholding tax levied on cross state royalty and interest payments; and the inclusion of the latest OECD provisions relating to exchange of taxpayer information.

“Cross border investment and businesses from South Africa to the rest of the world will definitely receive a boost, should these amendments to the DTA be ratified” states Kamal Hawabhay CA(SA) and Managing Director of GWMS Limited, a Mauritius based management company. Hawabhay will be providing critical insight into the South Africa/Mauritius DTA and Mauritius as a global fniancial centre at the Corporate Offshore Investment Mauritius 2015 conference, taking place in South Africa next week, 20-21 May at the Faircity Quatermain Hotel, Sandton, Johannesburg.

Although not confirmed at this stage, if all protocol procedures are completed as provided for in Article 28 (2) of the revised DTA, companies would need to implement the changes by as early as 1 January 2016.