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South African-Mauritian tax treaty could impact cross border investments

The new double tax treaty between Mauritius and South Africa that is due to come into effect in January 2016 could, according to some experts, act as a brake on cross-border investment. A revised “tie-breaker” clause which resolves tax residency status allows the South African and Mauritian Tax authorities to come to an agreement on which country has the first right to tax in cases where both countries claim taxing rights over the taxpayer, muddying the waters for multinational companies with Mauritian holdings in their group structures. Treaties with other countries use the “place of effective management” test in cases of dispute.

Read more at Business Day…

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