South Africa
Report from Prof. Johann Hattingh, University of Cape Town
Revenue Service issues final Guide on Mutual Agreement Procedures under tax treaties
On 25 July 2018, the South African Revenue Service (SARS) issued a final Guide on Mutual Agreement Procedures (MAP). For earlier coverage, see South Africa-1, News 22 May 2018.
The Guide deals with the following:
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situations in which the MAP may apply. These include settling dual residence, transfer pricing adjustments, withholding at source not in accordance with a tax treaty and, generally, difficulties in the interpretation or application of South Africa’s tax treaties;
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circumstances in terms of which SARS may accept or reject MAP requests from taxpayers. The information that must be supplied to SARS and the applicable timelines are described;
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the concurrent use and application of domestic law dispute resolution remedies;
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whether there is a right to access MAP when domestic or treaty-based anti-abuse rules have been applied by SARS. SARS proposes to provide access to MAP in cases in which there is a disagreement about the application of a treaty anti-abuse provision or application of a domestic law anti-abuse provision to a tax treaty;
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the process, format, information requirements, submission and withdrawal, and confidentiality of a MAP request;
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conducting a MAP, including SARS undertakings to notify and keep taxpayers informed, and the provision of interim double tax relief; and
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various further administrative issues, such as suspension of payment/collection of tax pending a MAP, the acceptance of bona fide transfer pricing self-adjustments in tax treaty partner countries, protective MAP filings, multilateral MAPs, etc.
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The Guide provides general guidance only. It is not an official publication and, therefore, will not be a source to establish a binding practice generally prevailing under section 5 of the Tax Administration Act 28 of 2011.
