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The Government of Canada and the Government of the
Republic of South Africa, desiring to conclude a
Convention for the avoidance of double taxation and the
prevention of fiscal evasion with respect to taxes on
income, have agreed as follows:
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This Convention shall apply to persons who are residents of
one or both of the Contracting States.
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1. The existing taxes to which the Convention shall apply are:
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(a) in the case of Canada:
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the taxes imposed by the Government of Canada under the
Income Tax Act (hereinafter referred to as ``Canadian
tax'');
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(b) in the case of South Africa:
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(ii) the non-resident shareholders' tax, and
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(iii) the secondary tax on companies,
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(hereinafter referred to as ``South African tax'').
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2. The Convention shall apply also to any identical or
substantially similar taxes which are imposed after the date of
signature of the Convention in addition to, or in place of, the
existing taxes. The competent authorities of the Contracting
States shall notify each other of any significant changes which
have been made in their respective taxation laws.
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1. In this Convention, unless the context otherwise requires:
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(a) the term ``Canada'', used in a geographical sense, means
the territory of Canada, including:
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(i) any area beyond the territorial seas of Canada which, in
accordance with international law and the laws of Canada,
is an area within which Canada may exercise rights with
respect to the seabed and subsoil and their natural
resources,
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(ii) the seas and airspace above every area referred to in
subparagraph (i) in respect of any activity carried on in
connection with the exploration for or the exploitation of
the natural resources referred to therein;
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(b) the term ``South Africa'' means the Republic of South
Africa and, when used in a geographical sense, includes the
territorial sea thereof as well as any area outside the territorial
sea, including the continental shelf, which has been or may
hereafter be designated, under the laws of South Africa and in
accordance with international law, as an area within which
South Africa may exercise sovereign rights or jurisdiction;
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(c) the terms ``a Contracting State'' and ``the other Contracting
State'' mean, as the context requires, Canada or South Africa;
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(d) the term ``person'' includes an individual, an estate, a trust,
a company and any other body of persons which is treated as
an entity for tax purposes; the term also includes a partnership
in the case of Canada;
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(e) the term ``company'' means any body corporate or any
entity which is treated as a body corporate for tax purposes;
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(f) the term ``competent authority'' means:
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(i) in the case of Canada, the Minister of National Revenue
or his authorized representative,
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(ii) in the case of South Africa, the Commissioner for
Inland Revenue or his authorized representative;
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(g) the term ``national'' means:
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(i) any individual possessing the nationality of a
Contracting State,
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(ii) any legal person, partnership and association deriving
its status as such from the laws in force in a Contracting
State;
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(h) the term ``international traffic'' means any transport by
ship or aircraft operated by a resident of a Contracting State,
except when the ship or aircraft is operated solely between
places in the other Contracting State.
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2. As regards the application of the Convention by a
Contracting State at any time, any term not defined therein shall,
unless the context otherwise requires, have the meaning which it
has at that time under the law of that State concerning the taxes
to which the Convention applies.
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1. For the purposes of this Convention, the term ``resident of
a Contracting State'' means:
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(a) in the case of Canada,
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(i) any person who, under the laws of Canada, is liable to
tax in Canada by reason of his domicile, residence, place of
management, place of incorporation or any other criterion
of a similar nature,
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(ii) Canada or a political subdivi-sion or local authority
thereof or any agency or instrumentality of Canada, or
subdivision or authority thereof;
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(b) in the case of South Africa, any individual who is
ordinarily resident in South Africa and any other person
which has its place of effective management in South Africa.
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2. Where by reason of the provisions of paragraph 1 an
individual is a resident of both Contracting States, then his status
shall be determined as follows:
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(a) he shall be deemed to be a resident only of the State in
which he has a permanent home available to him; if he has a
permanent home available to him in both States, he shall be
deemed to be a resident only of the State with which his
personal and economic relations are closer (centre of vital
interests);
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(b) if the State in which he has his centre of vital interests
cannot be determined, or if he has not a permanent home
available to him in either State, he shall be deemed to be a
resident only of the State in which he has an habitual abode;
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(c) if he has an habitual abode in both States or in neither of
them, he shall be deemed to be a resident only of the State of
which he is a national;
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(d) if he is a national of both States or of neither of them, the
competent authorities of the Contracting States shall settle the
question by mutual agreement.
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3. Where by reason of the provisions of paragraph 1 a
company is a resident of both Contracting States, then its status
shall be determined as follows:
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(a) it shall be deemed to be a resident only of the State of which
it is a national;
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(b) if it is a national of neither of the States, it shall be deemed
to be a resident only of the State in which its place of effective
management is situated.
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4. Where by reason of the provisions of paragraph 1 a person
other than an individual or a company is a resident of both
Contracting States, the competent authorities of the Contracting
States shall by mutual agreement endeavour to settle the question
and to determine the mode of application of the Convention to
such person.
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1. For the purposes of this Convention, the term ``permanent
establishment'' means a fixed place of business through which
the business of a resident of a Contracting State is wholly or
partly carried on.
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2. The term ``permanent establishment'' includes especially:
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(a) a place of management;
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(f) a mine, an oil or gas well, a quarry or any other place
relating to the exploration for or the exploitation of natural
resources.
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3. The term ``permanent establishment'' likewise
encompasses:
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(a) a building site, a construction, installation or assembly
project or supervisory activities in connection therewith, but
only where such site, project or activities continue for a period
of more than twelve months;
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(b) the furnishing of services, including consultancy services,
by a resident through employees or other personnel engaged
by the resident for such purpose, but only where activities of
that nature continue (for the same or a connected project)
within a Contracting State for a period of more than twelve
months.
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4. Notwithstanding the preceding provisions of this Article,
the term ``permanent establishment'' in respect of a resident of a
Contracting State shall be deemed not to include:
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(a) the use of facilities solely for the purpose of storage,
display or delivery of goods or merchandise belonging to the
resident;
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(b) the maintenance of a stock of goods or merchandise
belonging to the resident solely for the purpose of storage,
display or delivery;
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(c) the maintenance of a stock of goods or merchandise
belonging to the resident solely for the purpose of processing
by another person;
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(d) the maintenance of a fixed place of business solely for the
purpose of purchasing goods or merchandise, or of collecting
information, for the resident;
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(e) the maintenance of a fixed place of business solely for the
purpose of carrying on, for the resident, any other activity of
a preparatory or auxiliary character;
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(f) the maintenance of a fixed place of business solely for any
combination of activities mentioned in subparagraphs (a) to
(e) provided that the overall activity of the fixed place of
business resulting from this combination is of a preparatory or
auxiliary character.
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5. Notwithstanding the provisions of paragraphs 1 and 2,
where a person - other than an agent of an independent status to
whom paragraph 6 applies - is acting on behalf of a resident of a
Contracting State and has, and habitually exercises, in the other
Contracting State an authority to conclude contracts in the name
of the resident, that resident shall be deemed to have a permanent
establishment in that other State in respect of any activities which
that person undertakes for the resident unless the activities of
such person are limited to those mentioned in paragraph 4 which,
if exercised through a fixed place of business, would not make
this fixed place of business a permanent establishment under the
provisions of that paragraph.
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6. A resident of a Contracting State shall not be deemed to
have a permanent establishment in the other Contracting State
merely because it carries on business in that other State through
a broker, general commission agent or any other agent of an
independent status, provided that such persons are acting in the
ordinary course of their business.
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7. The fact that a company which is a resident of a Contracting
State controls or is controlled by a company which is a resident
of the other Contracting State, or which carries on business in that
other State (whether through a permanent establishment or
otherwise), shall not of itself constitute either company a
permanent establishment of the other.
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1. Income derived by a resident of a Contracting State from
immovable property (including income from agriculture or
forestry) situated in the other Contracting State may be taxed in
that other State.
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2. For the purposes of this Convention, the term ``immovable
property'' shall have the meaning which it has for taxation
purposes in the Contracting State in which the property in
question is situated. The term shall in any case include property
accessory to immovable property, livestock and equipment used
in agriculture and forestry, rights to which the provisions of
general law respecting landed property apply, usufruct of
immovable property and rights to variable or fixed payments as
consideration for the working of, or the right to work, mineral
deposits, sources and other natural resources. Ships and aircraft
shall not be regarded as immovable property.
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3. The provisions of paragraph 1 shall apply to income derived
from the direct use, letting or use in any other form of immovable
property and to income from the alienation of such property.
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4. The provisions of paragraphs 1 and 3 shall also apply to the
income from immovable property used in carrying on a business
or in the performance of independent personal services.
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1. The business profits of a resident of a Contracting State shall
be taxable only in that State unless the resident carries on
business in the other Contracting State through a permanent
establishment situated therein. If the resident carries on or has
carried on business as aforesaid, the business profits of the
resident may be taxed in the other State but only so much of them
as is attributable to that permanent establishment.
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2. Subject to the provisions of paragraph 3, where a resident
of a Contracting State carries on business in the other Contracting
State through a permanent establishment situated therein, there
shall in each Contracting State be attributed to that permanent
establishment the business profits which it might be expected to
make if it were a distinct and separate person engaged in the same
or similar activities under the same or similar conditions and
dealing wholly independently with the resident and with all other
persons.
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3. In the determination of the business profits of a permanent
establishment, there shall be allowed those deductible expenses
which are incurred for the purposes of the permanent
establishment including executive and general administrative
expenses, whether incurred in the State in which the permanent
establishment is situated or elsewhere.
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4. Insofar as it has been customary in a Contracting State to
determine the business profits to be attributed to a permanent
establishment on the basis of an apportionment, nothing in
paragraph 2 shall preclude that Contracting State from
determining the business profits to be taxed by such an
apportionment as may be customary. The method of
apportionment adopted shall, however, be such that the result
shall be in accordance with the principles contained in this
Article.
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5. No business profits shall be attributed to a permanent
establishment of a person by reason of the mere purchase by that
permanent establishment of goods or merchandise for the
person.
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6. For the purposes of the preceding paragraphs, the business
profits to be attributed to the permanent establishment shall be
determined by the same method year by year unless there is good
and sufficient reason to the contrary.
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7. Where business profits include items of income which are
dealt with separately in other Articles of this Convention, then
the provisions of those Articles shall not be affected by the
provisions of this Article.
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1. Profits derived by a resident of a Contracting State from the
operation of ships or aircraft in international traffic shall be
taxable only in that State.
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2. Notwithstanding the provisions of paragraph 1 and of
Article 7, profits derived by a resident of a Contracting State from
a voyage of a ship where the principal purpose of the voyage is
to transport passengers or property between places in the other
Contracting State may be taxed in that other State.
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3. The provisions of paragraphs 1 and 2 shall also apply to
profits referred to in those paragraphs derived by a resident of a
Contracting State from its participation in a pool, a joint business
or an international operating agency.
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4. For the purposes of this Article, profits from the operation
of ships or aircraft in international traffic shall include:
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(a) profits derived from the rental on a bare boat basis of ships
or aircraft used in international traffic, and
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(b) profits derived from the use or rental of containers and
related equipment,
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if such profits are incidental to the profits to which the provisions
of paragraph 1 apply.
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1. Where:
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(a) a resident of a Contracting State participates directly or
indirectly in the management, control or capital of a resident
of the other Contracting State, or
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(b) the same persons participate directly or indirectly in the
management, control or capital of a resident of a Contracting
State and a resident of the other Contracting State,
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and in either case conditions are made or imposed between the
two persons in their commercial or financial relations which
differ from those which would be made between independent
persons, then any income which would, but for those conditions,
have accrued to one of the persons, but, by reason of those
conditions, has not so accrued, may be included in the income of
that person and taxed accordingly.
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2. Where a Contracting State includes in the income of a
resident of that State - and taxes accordingly - income on which
a resident of the other Contracting State has been charged to tax
in that other State and the income so included is income which
would have accrued to the first-mentioned person if the
conditions made between the two persons had been those which
would have been made between independent persons, then that
other State shall make an appropriate adjustment to the amount
of tax charged therein on that income. In determining such
adjustment, due regard shall be had to the other provisions of this
Convention and the competent authorities of the Contracting
States shall if necessary consult each other.
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3. A Contracting State shall not change the income of a person
in the circumstances referred to in paragraph 1 after the expiry of
the time limits provided in its national laws and, in any case, after
five years from the end of the year in which the income which
would be subject to such change would, but for the conditions
referred to in paragraph 1, have accrued to that person.
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4. The provisions of paragraphs 2 and 3 shall not apply in the
case of fraud, wilful default or neglect.
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1. Dividends paid by a company which is a resident of a
Contracting State to a resident of the other Contracting State may
be taxed in that other State.
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2. However, such dividends may also be taxed in the
Contracting State of which the company paying the dividends is
a resident and according to the laws of that State, but if a resident
of the other Contracting State is the beneficial owner of the
dividends the tax so charged shall not exceed:
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(a) except in the case of dividends paid by a non-resident
owned investment corporation that is a resident of Canada, 5
per cent of the gross amount of the dividends if the beneficial
owner is a company which:
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(i) controls directly or indirectly at least 10 per cent of the
voting power in the company paying the dividends where
that company is a resident of Canada,
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(ii) holds directly at least 10 per cent of the capital of the
company paying the dividends where that company is a
resident of South Africa;
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(b) 15 per cent of the gross amount of the dividends in all other
cases.
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The provisions of this paragraph shall not affect the taxation of
the company on the profits out of which the dividends are paid.
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3. The term ``dividends'' as used in this Article means income
from shares or other rights, not being debt-claims, participating
in profits, as well as income which is subjected to the same
taxation treatment as income from shares by the laws of the State
of which the company making the distribution is a resident.
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4. The provisions of paragraph 2 shall not apply if the
beneficial owner of the dividends, being a resident of a
Contracting State, carries on business in the other Contracting
State of which the company paying the dividends is a resident,
through a permanent establishment situated therein, or performs
in that other State independent personal services from a fixed
base situated therein, and the holding in respect of which the
dividends are paid is effectively connected with such permanent
establishment or fixed base. In such case the provisions of Article
7 or Article 14, as the case may be, shall apply.
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5. Where a company which is a resident of a Contracting State
derives profits or income from the other Contracting State, that
other State may not impose any tax on the dividends paid by the
company, except insofar as such dividends are paid to a resident
of that other State or insofar as the holding in respect of which the
dividends are paid is effectively connected with a permanent
establishment or a fixed base situated in that other State, nor
subject the company's undistributed profits to a tax on
undistributed profits, even if the dividends paid or the
undistributed profits consist wholly or partly of profits or income
arising in such other State.
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6. Nothing in this Convention shall be construed as preventing
a Contracting State from imposing on the earnings of a company
attributable to a permanent establishment in that State, a tax in
addition to the tax which would be chargeable on the earnings of
a company which is a national of that State, provided that any
additional tax so imposed shall not exceed 5 per cent of the
amount of such earnings which have not been subjected to such
additional tax in previous taxation years. For the purpose of this
provision, the term ``earnings'' means the profits, including any
gains, attributable to a permanent establishment in a Contracting
State in a year and previous years after deducting therefrom all
taxes, other than the additional tax referred to herein, imposed on
such profits by that State.
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1. Interest arising in a Contracting State and paid to a resident
of the other Contracting State may be taxed in that other State.
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2. However, such interest may also be taxed in the Contracting
State in which it arises and according to the laws of that State, but
if a resident of the other Contracting State is the beneficial owner
of the interest the tax so charged shall not exceed 10 per cent of
the gross amount of the interest.
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3. Notwithstanding the provisions of paragraph 2:
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(a) interest arising in Canada and beneficially owned by a
resident of South Africa shall be taxable only in South Africa
if it is paid:
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(i) in respect of indebtedness of the government of Canada
or of a political subdivision or local authority thereof,
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(ii) to the South African Reserve Bank;
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(b) interest arising in South Africa and beneficially owned by
a resident of Canada shall be taxable only in Canada if it is
paid:
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(i) in respect of indebtedness of the government of South
Africa or of a political subdivision or local authority
thereof,
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(ii) to the Bank of Canada,
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(iii) in respect of a loan made, guaranteed or insured, or a
credit extended, guaranteed or insured by the Canadian
Export Development Corporation;
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(c) interest arising in a Contracting State and paid to a resident
of the other Contracting State which was constituted and is
operated exclusively to administer or provide benefits under
one or more pension, retirement or other employee benefits
plans shall not be taxable in the first-mentioned State provided
that:
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(i) the resident is the beneficial owner of the interest and is
generally exempt from tax in the other State, and
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(ii) the interest is not derived from carrying on a trade or a
business or from a related person; and
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(d) interest arising in a Contracting State and paid to a resident
of the other Contracting State who is the beneficial owner
thereof shall be taxable only in that other State to the extent
that such interest is paid with respect to indebtedness resulting
from the sale or furnishing on credit by a resident of that other
State of any equipment, merchandise or services, except
where the sale or furnishing is made between associated
persons within the meaning of subparagraphs (a) or (b) of
paragraph 1 of Article 9 or where the payer and the recipient
of the interest are associated persons within the meaning of the
same subparagraphs.
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4. The term ``interest'' as used in this Article means income
from debt-claims of every kind, whether or not secured by
mortgage, and in particular, income from government securities
and income from bonds or debentures, including premiums and
prizes attaching to such securities, bonds or debentures, as well
as income which is subjected to the same taxation treatment as
income from money lent by the laws of the State in which the
income arises. However, the term ``interest'' does not include
income dealt with in Article 10.
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5. The provisions of paragraph 2 shall not apply if the
beneficial owner of the interest, being a resident of a Contracting
State, carries on business in the other Contracting State in which
the interest arises through a permanent establishment situated
therein, or performs in that other State independent personal
services from a fixed base situated therein, and the debt-claim in
respect of which the interest is paid is effectively connected with
such permanent establishment or fixed base. In such case the
provisions of Article 7 or Article 14, as the case may be, shall
apply.
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6. Interest shall be deemed to arise in a Contracting State when
the payer is a resident of that State. Where, however, the person
paying the interest, whether he is a resident of a Contracting State
or not, has in a Contracting State a permanent establishment or
a fixed base in connection with which the indebtedness on which
the interest is paid was incurred, and such interest is borne by
such permanent establishment or fixed base, then such interest
shall be deemed to arise in the State in which the permanent
establishment or fixed base is situated.
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7. Where, by reason of a special relationship between the
payer and the beneficial owner or between both of them and some
other person, the amount of the interest, having regard to the
debt-claim for which it is paid, exceeds the amount which would
have been agreed upon by the payer and the beneficial owner in
the absence of such relationship, the provisions of this Article
shall apply only to the last-mentioned amount. In such case, the
excess part of the payments shall remain taxable according to the
laws of each Contracting State, due regard being had to the other
provisions of this Convention.
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1. Royalties arising in a Contracting State and paid to a
resident of the other Contracting State may be taxed in that other
State.
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2. However, such royalties may also be taxed in the
Contracting State in which they arise and according to the laws
of that State, but if a resident of the other Contracting State is the
beneficial owner of the royalties the tax so charged shall not
exceed:
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(a) 6 per cent of the gross amount of the royalties if they are:
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(i) copyright royalties and other like payments in respect of
the production or reproduction of any literary, dramatic,
musical or other artistic work (but not including royalties
in respect of motion picture films nor royalties in respect of
works on film or videotape or other means of reproduction
for use in connection with television broadcasting), or
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(ii) royalties for the use of, or the right to use, computer
software, or
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(iii) royalties for the use of, or the right to use, any patent
or any information concerning industrial, commercial or
scientific experience (but not including any such
information provided in connection with a rental or
franchise agreement);
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(b) 10 per cent of the gross amount of the royalties in all other
cases.
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3. The term ``royalties'' as used in this Article means payments
of any kind received as a consideration for the use of, or the right
to use, any copyright, patent, trade mark, design or model, plan,
secret formula or process or other intangible property, or for the
use of, or the right to use, industrial, commercial or scientific
equipment, or for information concerning industrial, commercial
or scientific experience, and includes payments of any kind in
respect of motion picture films and works on film, videotape or
other means of reproduction for use in connection with
television.
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4. The provisions of paragraph 2 shall not apply if the
beneficial owner of the royalties, being a resident of a
Contracting State, carries on business in the other Contracting
State in which the royalties arise through a permanent
establishment situated therein, or performs in that other State
independent personal services from a fixed base situated therein,
and the right or property in respect of which the royalties are paid
is effectively connected with such permanent establishment or
fixed base. In such case the provisions of Article 7 or Article 14,
as the case may be, shall apply.
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5. Royalties shall be deemed to arise in a Contracting State
when the payer is a resident of that State. Where, however, the
person paying the royalties, whether he is a resident of a
Contracting State or not, has in a Contracting State a permanent
establishment or a fixed base in connection with which the
obligation to pay the royalties was incurred, and such royalties
are borne by such permanent establishment or fixed base, then
such royalties shall be deemed to arise in the State in which the
permanent establishment or fixed base is situated.
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6. Where, by reason of a special relationship between the
payer and the beneficial owner or between both of them and some
other person, the amount of the royalties, having regard to the
use, right or information for which they are paid, exceeds the
amount which would have been agreed upon by the payer and the
beneficial owner in the absence of such relationship, the
provisions of this Article shall apply only to the last-mentioned
amount. In such case, the excess part of the payments shall
remain taxable according to the laws of each Contracting State,
due regard being had to the other provisions of this Convention.
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1. Gains derived by a resident of a Contracting State from the
alienation of immovable property situated in the other
Contracting State may be taxed in that other State.
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2. Gains from the alienation of movable property forming part
of the business property of a permanent establishment of a
resident of a Contracting State in the other Contracting State or
of movable property pertaining to a fixed base available to a
resident of a Contracting State in the other Contracting State for
the purpose of performing independent personal services,
including such gains from the alienation of such a permanent
establishment (alone or with the whole enterprise carried on by
such resident) or of such a fixed base may be taxed in that other
State.
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3. Gains from the alienation of ships or aircraft operated in
international traffic by a resident of a Contracting State or
movable property pertaining to the operation of such ships or
aircraft shall be taxable only in that State.
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4. Gains derived by a resident of a Contracting State from the
alienation of:
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(a) shares (other than shares listed on an approved stock
exchange in the other Contracting State) forming part of a
substantial interest in the capital stock of a company which is
a resident of that other State the value of which shares is
derived principally from immovable property situated in that
other State, or
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(b) a substantial interest in a partnership, trust or estate,
established under the law in the other Contracting State, the
value of which is derived principally from immovable
property situated in that other State,
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may be taxed in that other State. For the purposes of this
paragraph, the term ``immovable property'' includes the shares
of a company referred to in subparagraph (a) or an interest in a
partnership, trust or estate referred to in subparagraph (b) but
does not include any property, other than rental property, in
which the business of the company, partnership, trust or estate is
carried on. For the purposes of this paragraph, a substantial
interest exists when the resident, alone or together with related
persons, owns directly or indirectly at least 25 per cent of the
shares of any class of the capital stock of the company or has an
interest of at least 25 per cent in the partnership, trust or estate.
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5. Gains from the alienation of any property, other than that
referred to in paragraphs 1, 2, 3 and 4, shall be taxable only in the
Contracting State of which the alienator is a resident.
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6. The provisions of paragraph 5 shall not affect the right of a
Contracting State to levy, according to its law, a tax on gains from
the alienation of any property derived by an individual who is a
resident of the other Contracting State and has been a resident of
the first-mentioned State at any time during the six years
immediately preceding the alienation of the property if the
property was held by the individual before he became a resident
of that other State.
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1. Income derived by an individual who is a resident of a
Contracting State in respect of professional services or other
activities of an independent character shall be taxable only in that
State unless he has or had a fixed base regularly available to him
in the other Contracting State for the purpose of performing his
activities. If he has or had such a fixed base, the income may be
taxed in the other State but only so much of it as is attributable to
that fixed base. For the purposes of this provision, where an
individual who is a resident of a Contracting State stays in the
other Contracting State for a period or periods exceeding in the
aggregate 183 days in any twelve-month period commencing or
ending in the fiscal year concerned, he shall be deemed to have
a fixed base regularly available to him in that other State and the
income that is derived from his activities that are performed in
that other State shall be attributable to that fixed base.
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2. The term ``professional services'' includes especially
independent scientific, literary, artistic, educational or teaching
activities as well as the independent activities of physicians,
lawyers, engineers, architects, dentists and accountants.
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3. The third sentence of paragraph 1 shall cease to have effect
on the date an Agreement or a Convention, concluded after the
date of signature of this Convention, between South Africa and
a country that is a member country of the Organisation for
Economic Co-operation and Development, takes effect if that
Agreement or Convention does not provide for a provision that
is comparable to that found in that third sentence.
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1. Subject to the provisions of Articles 16, 18 and 19, salaries,
wages and other remuneration derived by a resident of a
Contracting State in respect of an employment shall be taxable
only in that State unless the employment is exercised in the other
Contracting State. If the employment is so exercised, such
remuneration as is derived therefrom may be taxed in that other
State.
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2. Notwithstanding the provisions of paragraph 1,
remuneration derived by a resident of a Contracting State in
respect of an employment exercised in the other Contracting
State shall be taxable only in the first-mentioned State if:
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(a) the recipient is present in the other State for a period or
periods not exceeding in the aggregate 183 days in any
twelve-month period commencing or ending in the fiscal year
concerned; and
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(b) the remuneration is paid by, or on behalf of, a person who
is not a resident of the other State; and
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(c) the remuneration is not borne by a permanent
establishment or a fixed base which the person has in the other
State.
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3. Notwithstanding the preceding provisions of this Article,
remuneration in respect of an employment exercised aboard a
ship or aircraft operated in international traffic by a resident of a
Contracting State shall be taxable only in that State unless the
remuneration is derived by a resident of the other Contracting
State.
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Directors' fees and other similar payments derived by a
resident of a Contracting State in his capacity as a member of the
board of directors or a similar organ of a company which is a
resident of the other Contracting State may be taxed in that other
State.
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1. Notwithstanding the provisions of Articles 7, 14 and 15,
income derived by a resident of a Contracting State as an
entertainer, such as a theatre, motion picture, radio or television
artiste, or a musician, or as a sportsman, from his personal
activities as such exercised in the other Contracting State, may be
taxed in that other State.
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2. Where income in respect of personal activities exercised by
an entertainer or a sportsman in his capacity as such accrues not
to the entertainer or sportsman himself but to another person, that
income may, notwithstanding the provisions of Articles 7, 14 and
15, be taxed in the Contracting State in which the activities of the
entertainer or sportsman are exercised.
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3. The provisions of paragraph 2 shall not apply if it is
established that neither the entertainer or the sportsman nor
persons related thereto, participate directly or indirectly in the
profits of the person referred to in that paragraph.
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4. The provisions of paragraphs 1 and 2 shall not apply to
income derived from activities performed in a Contracting State
by a resident of the other Contracting State in the context of a visit
in the first-mentioned State of a non-profit organization of the
other State, provided the visit is principally supported by public
funds.
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1. Pensions and annuities arising in a Contracting State and
paid to a resident of the other Contracting State may be taxed in
that other State.
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2. Pensions and annuities arising in a Contracting State and
paid to a resident of the other Contracting State may also be taxed
in the State in which they arise and according to the law of that
State.
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1. (a) Salaries, wages and similar remuneration, other than a
pension, paid by a Contracting State or a political subdivision
or a local authority thereof to an individual in respect of
services rendered to that State or subdivision or authority shall
be taxable only in that State;
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(b) However, such salaries, wages or similar remuneration
shall be taxable only in the other Contracting State if the
services are rendered in that State and the individual is a
resident of that State who:
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(i) is a national of that State; or
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(ii) did not become a resident of that State solely for the
purpose of rendering the services.
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2. The provisions of paragraph 1 shall not apply to
remuneration in respect of services rendered in connection with
a business carried on by a Contracting State or a political
subdivision or a local authority thereof.
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Payments which a student, apprentice or business trainee who
is, or was immediately before visiting a Contracting State, a
resident of the other Contracting State and who is present in the
first-mentioned State solely for the purpose of his education or
training receives for the purpose of his maintenance, education
or training shall not be taxed in that State, provided that such
payments arise from sources outside that State.
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1. Subject to the provisions of paragraph 2, items of income
of a resident of a Contracting State, wherever arising, not dealt
with in the foregoing Articles of this Convention shall be taxable
only in that State.
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2. However, if such income is derived by a resident of a
Contracting State from sources in the other Contracting State,
such income may also be taxed in the State in which it arises, and
according to the law of that State. Where such income is income
from an estate or a trust, other than a trust to which contributions
were deductible, the tax so charged shall, provided that the
income is taxable in the Contracting State in which the beneficial
owner is a resident, not exceed 15 per cent of the gross amount
of the income.
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1. In the case of Canada, double taxation shall be avoided as
follows:
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(a) subject to the existing provisions of the law of Canada
regarding the deduction from tax payable in Canada of tax
paid in a territory outside Canada and to any subsequent
modification of those provisions - which shall not affect the
general principle hereof - and unless a greater deduction or
relief is provided under the laws of Canada, tax payable in
South Africa on profits, income or gains arising in South
Africa shall be deducted from any Canadian tax payable in
respect of such profits, income or gains;
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(b) subject to the existing provisions of the law of Canada
regarding the taxation of income from a foreign affiliate and
to any subsequent modification of those provisions - which
shall not affect the general principle hereof - for the purpose
of computing Canadian tax, a company which is a resident of
Canada shall be allowed to deduct in computing its taxable
income any dividend received by it out of the exempt surplus
of a foreign affiliate which is a resident of South Africa;
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(c) where in accordance with any provision of the Convention
income derived by a resident of Canada is exempt from tax in
Canada, Canada may nevertheless, in calculating the amount
of tax on the remaining income of such resident, take into
account the exempted income.
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2. In the case of South Africa, taxes paid by a resident of South
Africa in respect of income taxable in Canada, in accordance with
the provisions of this Convention, shall be deducted from the
taxes due according to South African fiscal law. Such deduction
shall not, however, exceed an amount which bears to the total
South African tax payable the same ratio as the income
concerned bears to the total income.
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3. For the purposes of this Article, profits, income or gains of
a resident of a Contracting State which are taxed in the other
Contracting State in accordance with this Convention shall be
deemed to arise from sources in that other State.
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1. Nationals of a Contracting State shall not be subjected in the
other Contracting State to any taxation or any requirement
connected therewith which is more burdensome than the taxation
and connected requirements to which nationals of that other State
in the same circumstances are or may be subjected. This
provision shall, notwithstanding the provisions of Article 1, also
apply to individuals who are not residents of one or both of the
Contracting States.
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2. The taxation on a permanent establishment which a resident
of a Contracting State has in the other Contracting State shall not
be less favourably levied in that other State than the taxation
levied on residents of that other State carrying on the same
activities.
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3. Nothing in this Article shall be construed as obliging a
Contracting State to grant to residents of the other Contracting
State any personal allowances, reliefs and reductions for taxation
purposes on account of civil status or family responsibilities
which it grants to its own residents.
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4. Companies which are residents of a Contracting State, the
capital of which is wholly or partly owned or controlled, directly
or indirectly, by one or more residents of the other Contracting
State, shall not be subjected in the first-mentioned State to any
taxation or any requirement connected therewith which is more
burdensome than the taxation and connected requirements to
which other similar companies which are residents of the
first-mentioned State, the capital of which is wholly or partly
owned or controlled, directly or indirectly, by one or more
residents of a third State, are or may be subjected.
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5. In this Article, the term ``taxation'' means taxes which are
the subject of this Convention.
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1. Where a person considers that the actions of one or both of
the Contracting States result or will result for him in taxation not
in accordance with the provisions of this Convention, he may,
irrespective of the remedies provided by the domestic law of
those States, address to the competent authority of the
Contracting State of which he is a resident, or if his case comes
under paragraph 1 of Article 23, to that of the Contracting State
of which he is a national, an application in writing stating the
grounds for claiming the revision of such taxation. To be
admissible, the said application must be submitted within two
years from the first notification of the action which gives rise to
taxation not in accordance with the Convention.
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2. The competent authority referred to in paragraph 1 shall
endeavour, if the objection appears to it to be justified and if it is
not itself able to arrive at a satisfactory solution, to resolve the
case by mutual agreement with the competent authority of the
other Contracting State, with a view to the avoidance of taxation
not in accordance with the Convention.
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3. A Contracting State shall not, after the expiry of the time
limits provided in its national laws and, in any case, after five
years from the end of the taxable period in which the income
concerned has accrued, increase the tax base of a resident of either
of the Contracting States by including therein items of income
which have also been charged to tax in the other Contracting
State or increase the tax charged on such income. This paragraph
shall not apply in the case of fraud, wilful default or neglect.
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4. The competent authorities of the Contracting States shall
endeavour to resolve by mutual agreement any difficulties or
doubts arising as to the interpretation or application of the
Convention.
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5. The competent authorities of the Contracting States may
consult together for the elimination of double taxation in cases
not provided for in the Convention and may communicate with
each other directly for the purpose of applying the Convention.
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6. If any question, difficulty or doubt arising as to the
interpretation or application of the Convention cannot be
resolved or dealt with by the competent authorities as a result of
the application of the provisions of paragraphs 1, 2 or 3, these
questions, difficulties or doubts may, if the competent authorities
agree, be submitted to an arbitration commission. The decisions
of the commission shall be binding on the competent authorities.
The composition of the commission and the arbitration
procedures shall be determined by the competent authorities.
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1. The competent authorities of the Contracting States shall
exchange such information as is relevant for carrying out the
provisions of this Convention or of the domestic laws of the
Contracting States concerning taxes covered by the Convention
insofar as the taxation thereunder is not contrary to the
Convention. The exchange of information is not restricted by
Article 1. Any information received by a Contracting State shall
be treated as secret in the same manner as information obtained
under the domestic laws of that State.
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2. Nothing in paragraph 1 shall be construed so as to impose
on a Contracting State the obligation:
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(a) to carry out administrative measures at variance with the
laws or the administrative practice of that or of the other
Contracting State;
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(b) to supply information which is not obtainable under the
laws or in the normal course of the administration of that or of
the other Contracting State;
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(c) to supply information which would disclose any trade,
business, industrial, commercial or professional secret or trade
process, or information, the disclosure of which would be
contrary to public policy (ordre public).
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3. If information is requested by a Contracting State in
accordance with this Article, the other Contracting State shall
endeavour to obtain the information to which the request relates
in the same way as if its own taxation was involved
notwithstanding the fact that the other State does not, at that time,
need such information. If specifically requested by the
competent authority of a Contracting State, the competent
authority of the other Contracting State shall endeavour to
provide information under this Article in the form requested,
such as depositions of witnesses and copies of unedited original
documents (including books, papers, statements, records,
accounts or writings), to the same extent such depositions and
documents can be obtained under the laws and administrative
practices of that other State with respect to its own taxes.
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1. Nothing in this Convention shall affect the fiscal privileges
of diplomatic agents or consular officers under the general rules
of international law or under the provisions of special
agreements.
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2. Notwithstanding Article 4, an individual who is a member
of a diplomatic mission, consular post or permanent mission of
a Contracting State which is situated in the other Contracting
State or in a third State shall be deemed for the purposes of the
Convention to be a resident of the sending State if he is liable in
the sending State to the same obligations in relation to tax on his
total income as are residents of that sending State.
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3. The Convention shall not apply to international
organizations, to organs or officials thereof and to persons who
are members of a diplomatic mission, consular post or permanent
mission of a third State or group of States, being present in a
Contracting State and who are not liable in either Contracting
State to the same obligations in relation to tax on their total
income as are residents thereof.
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1. The provisions of this Convention shall not be construed to
restrict in any manner any exemption, allowance, credit or other
deduction accorded:
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(a) by the laws of a Contracting State in the determination of
the tax imposed by that State; or
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(b) by any other agreement entered into by a Contracting
State.
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2. Nothing in the Convention shall be construed as preventing
a Contracting State from imposing a tax on amounts included in
the income of a resident of that State with respect to a partnership,
trust, or company, in which he has an interest.
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3. Contributions in a year in respect of services rendered in that
year paid by, or on behalf of, an individual who is resident of one
of the Contracting States or who is temporarily present in that
State, to a pension plan that is recognized for tax purposes in the
other Contracting State shall, during a period not exceeding in
the aggregate 60 months, be treated in the same way for tax
purposes in the first-mentioned State as a contribution paid to a
pension plan that is recognized for tax purposes in that
first-mentioned State, provided that:
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(a) such individual was contributing on a regular basis to the
pension plan for a period ending immediately before he
became a resident of or temporarily present in the
first-mentioned State; and
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(b) the competent authority of the first-mentioned State agrees
that the pension plan generally corresponds to a pension plan
recognized for tax purposes by that State.
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For the purposes of this paragraph, ``pension plan'' includes a
pension plan created under the social security system in a
Contracting State.
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4. With respect to paragraph 3 of Article XXII of the General
Agreement on Trade in Services, the Contracting States agree
that, notwithstanding that paragraph, any dispute between them
as to whether a measure relating to a tax to which any provision
of this Convention applies falls within the scope of this
Convention may be brought before the Council for Trade in
Services, as provided by that paragraph, only with the consent of
the Contracting States.
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1. Each of the Contracting States shall notify to the other the
completion of the procedures required by its law for the bringing
into force of this Convention. The Convention shall enter into
force on the date of the later of these notifications.
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2. The provisions of the Convention shall apply:
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(a) with regard to taxes withheld at source, in respect of
amounts paid or credited on or after the first day of the third
month next following the date on which the Convention
enters into force; and
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(b) with regard to other taxes, in respect of taxable years
beginning on or after the first day of the third month next
following the date on which the Convention enters into force.
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1. This Convention shall remain in force indefinitely but either
of the Contracting States may terminate the Convention through
the diplomatic channel, by giving to the other Contracting State
written notice of termination not later than 30 June of any
calendar year starting five years after the year in which the
Convention entered into force.
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2. In such event, the Convention shall cease to have effect:
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(a) with regard to taxes withheld at source, in respect of
amounts paid or credited after the end of the calendar year in
which such notice is given; and
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(b) with regard to other taxes, in respect of taxable years
beginning after the end of the calendar year in which such
notice is given.
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IN WITNESS WHEREOF the undersigned, duly authorized
to that effect, have signed this Convention.
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DONE in duplicate at Toronto, this 27th day of November
1995, in the English and French languages, each version being
equally authentic.
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FOR THE GOVERNMENT OF CANADA:
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Roy MacLaren
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FOR THE GOVERNMENT OF THE REPUBLIC OF SOUTH
AFRICA:
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Trevor Manuel
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