South African Tax Court Upholds Exemption from Dividend Withholding Tax

South African taxpayers should furthermore consider the impact of this judgement on any historic and future dividend distributions. Since South Africa is renegotiating tax treaties that provide for 0% withholding tax on dividend distributions, the window of applicability may be limited. [...]the Cou...

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Bibliographic Details
Published in:Journal of International Taxation 2019-09, Vol.30 (9), p.10-11
Main Authors: Olaogun, Dele A, Keirby-Smith, Brigitte, Leivestad, Marius
Format: Article
Language:English
Subjects:
Dividend distributions
International taxation
Jurisprudence
Most favored nation clause
State court decisions
Tax court decisions
Tax courts
Tax rates
Tax treaties
Withholding taxes
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Summary:South African taxpayers should furthermore consider the impact of this judgement on any historic and future dividend distributions. Since South Africa is renegotiating tax treaties that provide for 0% withholding tax on dividend distributions, the window of applicability may be limited. [...]the Court dismissed the notion of an "intention" being read into the NLSA Treaty, argued on the basis that the MFN clause had not been intended to be triggered by MFN clauses in treaties concluded thereafter, making reference to the SA-SW Treaty. [...]South African taxpayers should: (i) review whether they have paid South African dividend withholding tax after 1 January 2016; and (ii) consider the impact of this judgment on future dividend distributions.
ISSN:1049-6378