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EXPLANATORY MEMORANDUM 

ON THE PROTOCOL AMENDING 

THE DOUBLE TAXATION AGREEMENT 

BETWEEN

THE REPUBLIC OF SOUTH AFRICA

AND

THE KINGDOM OF NORWAY

In order to accommodate changes which the Government of the Republic of 
South Africa and the Government of the Kingdom of Norway are desiring to enact to the Double Taxation Convention entered into between the Republic of South Africa and the Kingdom of Norway for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income, signed at Cape Town on 
12 February 1996 (in this Protocol referred to as “the Agreement”), a Protocol to the Agreement has been negotiated.

The following amendments have been agreed upon.

ARTICLE I

Article I introduces an updated Article 26 to the Agreement dealing with exchange of information.

Paragraph 1 provides that the States will exchange such information as is relevant both for carrying out the provisions of this Agreement and for applying the domestic taxation laws concerning any tax imposed on behalf of the Contracting States or of their political subdivisions or local authorities, in particular for the prevention of fraud or evasion of such taxes.  The exchange of information is not restricted by Articles 1 and 2 of the Agreement.  Thus, should South Africa obtain tax information relating to a resident of a third State who is liable for tax in Norway, it may make that information available to Norway.  The exchange extends to taxes of every kind and description.

Paragraph 2 provides that information obtained by a State under this provision must be treated with the same degree of secrecy as applies to information obtained under the domestic laws of that State.  In addition to this general stipulation on secrecy, it is specifically provided that it may be disclosed only to persons or authorities involved in the administration of the taxes imposed on behalf of a Contracting State or its political subdivisions or local authorities, and that those persons and authorities shall use the information only for the purposes of such administration.

In terms of paragraph 3, the provisions of paragraphs 1 and 2 will not impose on a State the obligation:

(a)	to do anything which is contrary to the laws and administrative practice of either State;

(b)	to supply information which is not obtainable under the laws of either State or in the normal course of the administration of either State;
(c)	to supply information which discloses any business secret, or information the disclosure of which is contrary to public policy.

In terms of paragraph 4, a Contracting State is obliged to exchange information even in cases where the requested information is not needed by that State for domestic tax purposes. Paragraph 4 further makes it clear that the obligation to exchange information is subject to the limitations of paragraph 3 but a Contracting State cannot decline to supply information solely because it has no domestic interest in such information.

Paragraph 5 provides that the requested Contracting State shall not decline to supply information to the requesting Contracting State solely because the requested information is held by a bank or other financial institution.  Paragraph 5 therefore overrides the provisions of paragraph 3 to the extent that paragraph 3 would otherwise permit the requested State to decline to supply the requested information on grounds of bank secrecy.  Paragraph 5 further provides that the requested State shall not refuse to supply the requested information on grounds that the information is held by persons acting in an agency or fiduciary capacity or because the information relates to an ownership interest in a person, including companies and partnerships, foundations or similar organisational structures.

ARTICLE II

Paragraph 1 stipulates that the Government of the Republic of South Africa Government of the Kingdom of Norway will notify each other in writing through the diplomatic channel of completion of their domestic requirements for the entry into force of this Protocol which will form an integral part of the Agreement.  

Paragraph 2 specifies that this Protocol shall enter into force in both Contracting States on the date of the later of these notifications and that this will be the effective date of the Protocol, in both States.

ARTICLE III

This Article makes provision for the Protocol to remain in force as long as the Agreement remains in force.