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June 2015

RENEGOTIATED DOUBLE TAXATION AVOIDANCE AGREEMENT BETWEEN THE REPUBLIC OF SOUTH AFRICA (SA) AND THE REPUBLIC OF MAURITIUS (MAURITIUS)

The revised SA/Mauritius Treaty will take effect from 1 January 2016. A Mutual Agreement Procedure (MAP) between the two countries will determine a single residency in cases of dual residency for legal persons other than individuals. The new Memorandum of Understanding (MOU) (see below) provides further guidance in terms of process.

INTERNAL AUDIT – ADDING VALUE OR ADDING PAPER?

Many internal audit functions within organisations fail to add practical value that exceeds their costs.  Why is this?   Firstly, it is our experience that an internal audit function is hard pressed to demonstrate and deliver value if not underpinned by a robust Enterprise-wide Risk Management (ERM) process.  In fact, where there is no ERM process in place, it is our recommendation that internal audit resources should first be applied in establishing an ERM process.  

CLARIFICATION ON TAX CLEARANCE APPLICATIONS FOR FOREIGN INVESTMENT PURPOSES

In the February Budget Review, National Treasury indicated that as from 1 April 2015 a South African resident’s (individuals only) foreign capital allowance would increase from R4 million to R10 million per calendar year. In order to take funds offshore, individuals would have to obtain a foreign tax clearance certificate from SARS before they could transfer the funds offshore.