An Agreement for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income was signed in Cape Town today by the Deputy Minister of Finance, Ms Gill Marcus and the Ambassador of the Seychelles Permanent Mission to the United Nations, Mr Claude Morel.
It is practice in most countries for income tax to be imposed both on the world-wide income derived by residents of the country and on income derived by non-residents which arises in the country. The effect of such a system is that income derived by a resident of one country from a source in another country is subjected to tax in both countries. As this position clearly discourages foreign investment, it is normal for countries which have trade relations to conclude double taxation agreements. Such agreements commonly provide that income of a particular nature will be taxable in only one of the countries, or may be taxed in both countries with one of them allowing a credit for the tax imposed by the other. In the context of the tax systems of South Africa and Seychelles, this is of particular importance to investment income.
The Agreement is similar to other agreements which have been entered into in the past with other countries and will come into force after all the constitutional procedures have been completed by both countries.
ISSUED BY THE COMMISSIONER FOR THE SOUTH AFRICAN REVENUE SERVICE
PRETORIA
Contact person:
Ron van der Merwe
Tel: (012) 315-5301
Fax: (012) 325-5306