Issued by: Ministry of Finance
7 OCTOBER 1997
SIGNING OF A DOUBLE TAX CONVENTION BETWEEN SOUTH AFRICA AND IRELAND
A Convention for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income was signed in Pretoria today by the Deputy Minister of Finance, Ms Gill Marcus and the Ambassador of Ireland to the Republic of South Africa, Mr Eamon O Tuathail.
It is practice in most countries for income tax to be imposed both on the world-wide income derived by residents of the country and on income derived by non-residents which arises in the country. The effect of such a system is that income derived by a resident of one country from a source in another country is subjected to tax in both countries. As this position clearly discourages foreign investment, it is normal for countries which have trade relations to conclude double taxation agreements. Such agreements commonly provide that income of a particular nature will be taxable in only one of the countries, or may be taxed in both countries with one of them allowing a credit for the tax imposed by the other.
The Convention, which is the first comprehensive treaty of this nature to be concluded between South Africa and Ireland, is similar to other agreements which have been entered into in the past with other countries and is regarded as essential in view of the increasing trade and investment between South Africa and Ireland. It will come into force after all the required procedures have been completed by both countries.
Issued by: Ministry of Finance Cape Town 7 October 1997