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Status of DTAs signed but not ratified

Friday, 24 October 2014   (0 Comments)
Posted by: Author: SAIT Technical
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Author: SAIT Technical

Q: I would like to provide an opinion on investing in Chile. The DTA between SA and Chile is, however, only signed not ratified. What is meant when a DTA is signed not Ratified?

A: This is dealt with in section 108 of the Income Tax Act (and of course the Constitution allows for it).  The process is as follows:

The two countries sign the agreement after it has been negotiated.  It must then be ratified by both countries.  In terms of the RSA ratify means ‘approval by Parliament of any such agreement, as contemplated in section 231 of the Constitution’.  The next step would then be to notify, by publication in the Gazette, the arrangements thereby made.  The arrangements so notified shall thereupon have effect as if enacted in the relevant Act.  

The agreement with Chile is therefore not effective yet.

Disclaimer: Nothing in this query and answer should be construed as constituting tax advice or a tax opinion. An expert should be consulted for advice based on the facts and circumstances of each transaction/case. Even though great care has been taken to ensure the accuracy of the answer, SAIT do not accept any responsibility for consequences of decisions taken based on this query and answer. It remains your own responsibility to consult the relevant primary resources when taking a decision.



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