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TIEA With San Marino now in Effect

South Africa

The first agreement for the exchange of information relating to tax matters concluded by South Africa with San Marino took effect on 28 January 2012. Taxand South Africa XXX

South Africa has concluded a large number of double taxation agreements with its trading partners which generally contain an article which authorises the exchange of information between South Africa and the treaty partner. Furthermore, exchange of information agreements are in the process of negotiation between South Africa and Bahamas, Bermuda, Cayman Islands, Guernsey, Jersey, Argentina, Barbados, British Virgin Island, Brunei Darussalam, Costa Rica, Dominica, Georgia, Gibraltar, Jamaica, Liberia, Lichtenstein, Monaco, Saint Kitts and Nevis, Samoa and the Turks and Caicos Islands. In addition, South Africa has signed on 3 November 2011, but not yet ratified, the Multilateral Convention on Mutual Administrative Assistance on Tax Matters as amended by the protocol which facilitates the exchange of information between parties who have adopted the Convention. South Africa is a member of the Organisation for Economic Co-operation and Development (OECD)'s Global Forum on Transparency and Exchange of Information for Tax Purposes. At the Global Forum's meeting held in Mexico during 2009 it was decided to put a peer review mechanism in place for all members of the Global Forum based on its standards of transparency and information exchange for tax purposes.

South Africa has undertaken an obligation to ensure that it complies with the standards prescribed by the Global Forum and is therefore required to conclude exchange of information agreements with various countries so that it complies with those standards. It is for the above reason that the South African government has concluded an exchange of information agreement with San Marino. The agreement in question was published in the Government Gazette on 25 January 2012 and it is stated that the agreement entered into force on 28 January 2012.

The purpose of the agreement is described as being to promote international efforts in the fight against financial and other crimes, including the targeting of terrorist financing. Furthermore, the agreement is aimed at facilitating the terms and conditions governing the exchange of information relating to taxes. The scope of the agreement is described as providing assistance via the exchange of information that is foreseeably relevant to the administration and enforcement of the domestic laws of the contracting countries relating to the taxes covered by the agreement. This includes information which is foreseeably relevant to the determination, assessment, enforcement or collection of tax with respect to persons subject to those taxes or to the investigation of tax matters or the prosecution of criminal tax matters in relation to such persons.

Taxand's Take

The agreement concluded by South Africa and San Marino is based on the OECD's model agreement for tax information exchange agreements. Clearly, the conclusion of the exchange of information agreements for tax purposes increases the reach the Commissioner: South African Revenue Service to obtain information from abroad regarding taxpayers residing in South Africa. It also imposes an obligation on South Africa to provide information to another country where the other contracting state requires information regarding its taxpayers who may have business dealings in South Africa.

As pointed out above, the conclusion of the agreements for the exchange of information in tax matters is required so that South Africa can comply with its international obligations imposed on it as result of its membership with the Global Forum on Transparency and Exchange of Information for Tax Purposes.

Beric John Croome
T. +27 11 269 7720


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