Tax Treaty Case Law around the Globe 2020
1. Aufl. 2021
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S. 95Chapter 10 South Africa: The Dangers of Most-Favoured-Nation Clauses
Craig West
10.1. Introduction
The case of ABC Proprietary Limited is a Tax Court judgment and, therefore, creates no precedent in South Africa. Despite the lack of precedential value, this case was heard in both the Netherlands and South Africa, albeit with dividend flows in different directions. Further, the matter was heard in both civil and common law systems, providing a unique opportunity to see the manner in which the courts arrived at their decisions. The Dutch case (Case 17/04584) is reviewed elsewhere in this book. The South African decision was made after the Dutch decision (to which the South African court referred, albeit only in respect of costs).
10.2. Facts of the case
The taxpayer in this case was a company resident in South Africa for tax purposes and was wholly owned by a company resident in the Netherlands for tax purposes, to which dividends were paid.
For the dividends declared by the taxpayer in April and October 2012, the foreign shareholder made the necessary declarations, in terms of the domestic law, for the domestic withholding rate for the dividends to be reduced from 20% to 5% for qualifying...