The Legal and Policy Division of the South African Revenue Service (SARS) has issued a Binding General Ruling (BGR) on income taxes, or substantially similar taxes, following the double tax agreements (DTAs) of South Africa.
According to this BGR the taxes that are relieved from double taxes are the normal tax on income, which includes taxable capital gains; the withholding tax on royalties; the withholding tax on foreign entertainers and sportspersons; the turnover tax on micro businesses; and the secondary tax on companies (STC).
In addition to that the employees’ tax, provisional tax, and amounts withheld from payments to non-resident sellers of immovable property in South Africa, all represent advance payments of normal tax; and the taxes on income which are to be introduced in the near future – a final withholding tax on dividends, effective from April 1, 2012, and a final withholding tax on interest, effective from January 1, 2013 – will also qualify for treaty relief under this BGR.
