The African Tax Administration Forum (ATAF) has come up with a draft document on avoidance of double taxation and prevention of fiscal evasion with respect to taxes on income in Africa.
In a multilateral meeting, ATAF, an organization established 5 years ago providing a platform to improve the capability and performance of tax administrations across Africa, has developed the draft text of an “ATAF Model Agreement for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income for the African continent”.
ATAF member countries include Zimbabwe, South Africa, Angola, Benin, Botswana, Burundi, Chad, Gabon, Ghana, Kenya, Lesotho, Mauritius, Uganda, Swaziland, Zambia and Namibia.
The Zimbabwe Revenue Authority (Zimra) said DTAs are important tools in removing barriers to cross-border trade and investment. It said that “one of the areas identified by African States as a priority for the mobilisation of domestic resources is that of agreements for the Avoidance of Double Taxation (DTAs).”
Zimra said the Model Agreement provides an agreed basis for approximately 75% – 80% of a DTA for any African country and so only the negotiation of domestically driven specific areas such as withholding rates and definition of permanent establishments are required. The ATAF model will possibly address a larger membership of African states and will maintain relative consistency with other existing models.
Transfer Pricing Associates introduces TPA AFRICA Desk. If you have any questions, or need more detailed advice on any aspects of transfer pricing or taxes, please get in touch with us. The TPA Global network has alliance partners throughout Africa, and the network can provide multi-disciplinary approach on today’s critical transfer pricing challenges faced by multinational enterprises.
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