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MOU between RSA and Mauritius on how to apply DTA tie-breaker clause

Wednesday, 03 June 2015   (0 Comments)
Posted by: Authors: Lesedi Seforo and others
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Authors: Lesedi Seforo (SAIT) with contributions by Alan Witherden (ABAX)

On 17 May 2013, the renegotiated double tax treaty between RSA and Mauritius was signed. The renegotiated double tax treaty will come into force as from 1 January 2016.

As anticipated, article 4(3) of the treaty contains a revised so-called "tie-breaker” clause. It states that in cases of dual residence in respect of an entity, the competent authorities of both countries must mutually agree on which jurisdiction such person will be considered a resident for treaty purposes. In other words, automatic treaty resolution of dual residence will no longer exist (as was the case under the former treaty). 

However,a Memorandum of Understanding (MOU) between RSA and Mauritius has recently been signed that provides the competent authorities (i.e. revenue authorities of both countries) will consider a number of factors when seeking mutual resolution of dual entity residence.

These factors include: 

  • where board meetings are held
  • where the CEO and senior executives usually carry on their activities    
  • where the senior day-to-day management is conducted  
  • where the person’s senior headquarters are located etc….

The MOU can be accessed by here



Section 240A of the Tax Administration Act, 2011 (as amended) requires that all tax practitioners register with a recognized controlling body before 1 July 2013. It is a criminal offense to not register with both a recognized controlling body and SARS.

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