Double Taxation Relief (Taxes on Income)

L.N. 392 of 2013

INCOME TAX ACT

(CAP. 123)

Double Taxation Relief (Taxes on Income)

(South Africa) (Amendment) Order, 2013

IN exercise of the powers conferred by article 76 of the Income

Tax Act, the Minister for Finance has made the following order:-

The title of this order is the Double Taxation Relief (Taxes Citation.

on Income) (South Africa) (Amendment) Order, 2013 and this order

shall be read and construed as one with the Double Taxation Relief S.L. 123.45

(Taxes on Income) (South Africa) Order, hereinafter referred to as

"the principal order".

(Article 2)

PROTOCOL

AMENDING THE AGREEMENT

BETWEEN

THE GOVERNMENT OF MALTA

AND

THE GOVERNMENT OF THE REPUBLIC OF SOUTH AFRICA

FOR THE AVOIDANCE OF DOUBLE TAXATION

AND

THE PREVENTION OF FISCAL EVASION

WITH RESPECT TO TAXES ON INCOME,

SIGNED AT ROME ON 16 MAY 1997

Preamble

The Government of Malta and the Government of the Republic of South

Africa;

DESIRING to amend the Agreement for the avoidance of double taxation

and the prevention of fiscal evasion with respect to taxes on income, signed at

Rome, Italy on 16 May 1997 (in this Protocol referred to as "the Agreement");

HAVE AGREED as follows

Article I

Paragraph 1 of Article 4 of the Agreement shall be deleted and replaced by

the following paragraph

"1. For the purposes of this Agreement, the term "resident of a

Contracting State" means any person who, under the laws of that State, is

liable to tax therein by reason of that person’s domicile, residence, place of

management or any other criterion of a similar nature, and also includes that

State and any political subdivision or local authority thereof. This term,

however, does not include any person who is liable to tax in that State in

respect only of income from sources in that State.".

Article II

Paragraph 2 of Article 10 of the Agreement shall be deleted and replaced by

the following paragraph

"2. However, such dividends may also be taxed in the Contracting

State of which the company paying the dividends is a resident and according

to the laws of that State, but

(a) where the dividends are paid by a company which is

resident of South Africa to a resident of Malta who is the beneficial

owner thereof, the tax so charged shall not exceed

(i) 5 per cent of the gross amount of the dividends if the

beneficial owner is a company which holds at least 10 per cent

of the capital of the company paying the dividends; or

(ii) 10 per cent of the gross amount of the dividends in

all other cases.

(b) where the dividends are paid by a company which is a

resident of Malta to a resident of South Africa who is the beneficial

owner thereof, Malta tax on the gross amount of the dividends shall not

exceed that chargeable on the profits out of which the dividends are

The competent authorities of the Contracting States shall by mutual

agreement settle the mode of application of these limitations.

This paragraph shall not affect the taxation of the company in respect of

the profits out of which the dividends are paid.".

ARTICLE III

Article 11 of the Agreement is amended by

(a)

deleting paragraph 3 and substituting the following paragraph

"3. Notwithstanding the provisions of paragraph 2, interest

arising in a Contracting State shall be exempt from tax in that State if

(a) the payer of the interest is the Government of that

Contracting State or a political subdivision or a local authority

thereof; or

(b) the interest is paid to the Government of the other

Contracting State or a political subdivision or a local authority

thereof; or

(c) the interest is paid by the Central Bank of that

Contracting State or to the Central Bank of the other Contracting

State; or

(d) the interest is paid to any institution or body which is

wholly owned, directly or indirectly, by the other Contracting

State or a political subdivision or a local authority thereof; or

(e) the interest arises in respect of any debt instrument

listed on a recognised stock exchange.";

(b)

inserting after paragraph 3 the following paragraph

"4. For the purposes of paragraph 3(e), the term "recognised

stock exchange" means

(a)

in Malta, the Malta Stock Exchange;

(b)

in South Africa, the Johannesburg Stock Exchange;

(c) any other stock exchange agreed upon by the

competent authorities of the Contracting States.";

(c)

renumbering the existing paragraphs 4, 5, 6 and 7 as paragraphs

5, 6, 7 and 8 respectively.

ARTICLE IV

Article 25 of the Agreement shall be deleted and replaced by the following

"Article 25

Exchange of Information

1. The competent authorities of the Contracting States shall

exchange such information as is foreseeably relevant for carrying out the

provisions of this Agreement or to the administration or enforcement of the

domestic laws concerning taxes of every kind and description imposed on

behalf of the Contracting States, or of their political subdivisions or local

authorities, in so far as the taxation thereunder is not contrary to the

Agreement. The exchange of information is not restricted by Articles 1 and

2.

2. Any information received under paragraph 1 by a Contracting

State shall be treated as secret in the same manner as information obtained

under the domestic laws of that State and shall be disclosed only to persons

or authorities (including courts and administrative bodies) concerned with

the assessment or collection of, the enforcement or prosecution in respect of,

the determination of appeals in relation to the taxes referred to in paragraph

1, or the oversight of the above. Such persons or authorities shall use the

information only for such purposes. They may disclose the information in

public court proceedings or in judicial decisions.

It is hereby declared

Arragements to

have effect.

(a)

that the amendments to the principal order, as

specified in the Protocol set out in the Schedule to this order

(hereinafter referred to as "the Protocol"), have been made with

the Government of the Republic of South Africa;

(b) that it is expedient that those amendments should

have effect following the entry into force of the Protocol and in

accordance with the relevant provisions of the Protocol;

(c)

that the Protocol shall enter into force on such date

as may be announced by notice in the Government Gazette.

In no case shall the provisions of paragraphs 1 and 2 be construed

so as to impose on a Contracting State the obligation

(a) to carry out administrative measures at variance with the

laws and administrative practice of that or of the other Contracting

State;

(b) to supply information which is not obtainable under the

laws or in the normal course of the administration of that or of the other

Contracting State;

(c) to supply information which would disclose any trade,

business, industrial, commercial or professional secret or trade process,

or information, the disclosure of which would be contrary to public

policy (ordre public).

If information is requested by a Contracting State in accordance

with this Article, the other Contracting State shall use its information

gathering measures to obtain the requested information, even though that

other State may not need such information for its own tax purposes. The

obligation contained in the preceding sentence is subject to the limitations of

paragraph 3 but in no case shall such limitations be construed to permit a

Contracting State to decline to supply information solely because it has no

domestic interest in such information.

In no case shall the provisions of paragraph 3 be construed to

permit a Contracting State to decline to supply information solely because

the information is held by a bank, other financial institution, nominee or

person acting in an agency or a fiduciary capacity or because it relates to

ownership interests in a person.".

Article V

1. Each of the Contracting States shall notify to the other in writing,

through the diplomatic channel, of the completion of the procedures required by its

law for the bringing into force of this Protocol, which shall form an integral part of

the Agreement. The Protocol shall enter into force on the date of receipt of the later

of these notifications.

2. (a)

Subject to subparagraph (b), the provisions of the Protocol shall

apply from the date of entry into force thereof.

(b) Article II of the Protocol shall apply from the date of the

introduction in South Africa of the system of taxation at shareholder level of

dividends declared. South Africa shall notify Malta in writing, through the

diplomatic channel, of the completion of the procedures required by its law for the

bringing into force of the South African system of taxation at shareholder level of

dividends declared, as well as the date of entry into force of this system.

Article VI

This Protocol shall remain in force for as long as the Agreement remains in

force.

IN WITNESS WHEREOF the undersigned, duly authorised thereto by their

respective Governments, have signed and sealed this Protocol in two originals in

the English language.

DONE at Valletta, this 24 day of August 2012.

Tonio Fenech

Pravin Jamnadas Gordhan

For the Government of

For the Government of the

Malta

Republic of South Africa

€0.54