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Cyprus: Protocol on the double tax treaty signed between Cyprus and South Africa


Katerina Charalambous

A protocol amending the Agreement for the Avoidance of Double Taxation and Prevention of Fiscal Evasion with respect to Taxes on Income and on Capital between South Africa and Cyprus was signed on April 1 2015. According to the protocol, article 10 (Dividends) of the double tax treaty will be replaced. As such, dividends paid by a company resident in one contracting state to a company resident in the other contracting state will be taxed in the latter. Nonetheless, withholding tax (WHT) will be incurred in the first mentioned state at a rate of 5% in cases where the beneficial owner of the dividend holds at least 10% of the capital in the dividend paying company. In a different case, a 10% WHT will be incurred on the gross amount of the dividends. It is also noted that the two contracting states will by mutual agreement decide on the application of these limitations.

Article 26 (Exchange of Information) of the Treaty will also be replaced to include further clarifications in relation to the exchange of information process between the two states. More specifically, the wording in paragraph 1 of article 26, is altered to clarify that the states will exchange as much information as is foreseeably relevant for carrying out the provisions of the agreement, replacing the phrase "as much information as is necessary". The change is in line with the OECD Model Treaty and the Commentary, according to which states must exchange information to the widest possible extent but are not at liberty to engage in 'fishing expeditions'. Additional paragraphs are also included to clarify that the state which receives an information exchange request will use its internal processes to retrieve said information even if this is not necessary for its own domestic purposes.

The protocol will enter into force as soon as the contracting states notify each other on the completion of the procedures required by their domestic legislation. Once the protocol enters into force it will constitute an integral part of the agreement between the two states.

Katerina Charalambous (

Eurofast, Cyprus Office

Tel: +357 22 699 222


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