National Treasury and the South African Revenue Service briefed the Committee on the signed tax treaties that SA had entered into with Sudan and Australia and that required ratification by Parliament. Reasons for the treaties were spelt out. Members were given a breakdown of figures of trade and investment between countries as well as insight into the more interesting provisions contained in the treaties. The Committee approved the ratification of both treaties by Parliament. The Committee was also briefed on preparations for similar tax treaties with
The delegation comprised of Ms Yanga Mputa, Director: Tax Policy Unit: National Treasury, Mr Ron van der Merwe Senior Manager International Treaties: SARS, Ms Oshna Maharaj, Assistant Manager: International Treaties: SARS, Mr Thanduxolo Twala, Assistant Manager: International Treaties: SARS, Mr Luthando Mvovo, Deputy Director: Tax Policy Unit: National Treasury.
Ms Mputa commenced the briefing explaining the parliamentary ratification process necessary for the signed tax treaties with
She provided reasons for the need of such a tax treaty with
Mr van der Merwe continued with a technical explanation of the treaties with
The Sudan-SA Double Taxation Agreement closely followed the Organisation for Economic Co-operation and Development (OECD) Model Convention which formed the foundation for the vast majority of Double Taxation Agreements (DTAs) worldwide. He highlighted some of the Articles of interest contained in the Sudan-SA Tax Treaty.
Mr van der Merwe noted that the SA-Australia Protocol amended the existing Double Taxation Agreement. Again, the protocol closely followed the OECD Model Convention, which formed the foundation of the vast majority of Double Taxation Agreements worldwide. Amendments to the existing Agreement became necessary in view of the proposed phasing out of the secondary tax on companies and its replacement with a dividends tax. He highlighted some of the Articles of interest contained in the protocol.
Ms Mputa provided a very quick presentation on the preliminary hearings on tax treaties with
Mr D Botha (ANC,
Ms Mputa said that there might be an imbalance but it was definitely in favour of SA.
Mr M Robertson (ANC,
Mr E Sogoni (ANC,
The Chair agreed and said the Committee shared the same sentiments.
Mr Robertson asked what the mechanical appliances being exported to
Ms Mputa only confirmed that the mechanical appliances being exported and those being imported were different.
Mr Ralane asked what mineral products SA was importing from
Ms Mputa replied that currently PetroSA was only doing exploration in
Mr Sogoni asked why treaties with
Mr van der Merwe responded that
The Committee approved the ratification of the Sudan-SA Treaty.
Mr Sogoni asked how the Australian Treaty differed from the one with
Mr van der Merwe replied that the Australian treaty was also based on the OECD as
He noted that the treaty with
The Chair pointed out that the treaties were of value in all respects.
The Committee approved the ratification of the treaty with
Mr Botha commented that there was little value on the imports from
Mr van der Merwe said the value of the treaty with
Mr B Mkhaliphi (ANC,
The Chair could understand the exemptions for teachers as there was a shortage of skills, especially mathematics teachers. He was puzzled as to why the tax exemption applied to researchers. Mr Ralane felt that SA had researchers. He commented that the OECD seemed to be a one size fits all model.
Mr van der Merwe replied that the OECD and the UN treaties were international models. Every treaty was a combination of OECD and UN models. He said that they had a particular structure. It allowed for consistency of trans-border taxation. Certainty was created. Hence the one size fits all with variations depending on the policy of a particular country.
Mr Sogoni said that the WTO forum often fought for special dispensations for developing countries. He said that the one size fits all was a problem.
The Chair said that each country had its own trade tools. He said that perhaps a workshop was needed to look into the issue.
Ms Mputa responded that SA was not always a developing country. SA was considered a developed country to
Mr Sogoni asked if there was actual assistance for treaty countries in
Mr van der Merwe replied that there was no actual assistance for countries in the collection of taxes. There was however an exchange of information. He explained that dividends in the hands of shareholders were not taxed.
The Chair suggested that the Committee for now not ask questions pertaining to the preliminary treaties with
The Committee agreed and the meeting was adjourned.
- Preliminary Double Taxation Agreements: United Arab Emirates & Mexico (SARS)
- Preliminary Hearings: Tax Treaties with Mexico & United Arab Emirates (National Treasury)
- Ratification Double Taxation Agreements: Sudan DTA Agreement & Australia Protocol (SARS)
- Ratification: Tax Treaties with Sudan & Australia 24 June 2008 (National Treasury)
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