Double Taxation Agreement Usa And South Africa
South Africans who live and earn in Australia are covered by this double taxation treaty. In July 2012, the United States introduced the possibility for a country to enter into an intergovernmental agreement that would reduce the need for financial institutions to enter into an agreement directly with the United States. The Agreement on Improving International Tax Compliance and Implementing the Foreign Account Tax Compliance Act between the United States and South Africa is a mutual agreement that ensures that financial institutions in South Africa report information on U.S. account holders to the South African Revenue Service (SARS). In turn, SARS will transmit this information to the IRS through the Automatic Exchange of Information (AIA) under the U.S.-South Africa Double Taxation Convention. Conversely, the IRS will provide SARS-like information on South African account holders in the United States. Pretoria: South African Finance Minister Nhlanhla Nene and U.S. Ambassador to South Africa Patrick H. Gaspard today signed an intergovernmental agreement to improve international tax compliance and implement the Foreign Account Tax Compliance Act. This agreement promotes tax transparency between the two nations and also highlights the growing international cooperation to end tax evasion worldwide. Ambassador Gaspard, who signed on behalf of the United States, said: „The signing of these agreements is an important step in the cooperation between the United States and South Africa to combat tax evasion.
If foreign taxpayers avoid paying what they owe, other taxpayers have to bear a disproportionate share of the tax burden. The intergovernmental agreement to improve international tax compliance and implement FATCA is an important part of the United States. The government`s efforts to address this issue. The United States passed the Foreign Account Tax Compliance Act (FATCA) in 2010 to combat tax evasion at sea, promoting transparency and obtaining information about the accounts of U.S. citizens in other countries. FATCA requires foreign financial institutions to provide the U.S. Internal Revenue Service (IRS) with information about U.S. account holders on an annual annual. Otherwise, the foreign financial institution will be subject to a 30% withholding tax on certain U.S. source payments, such as interest.
However, withholding tax is eliminated when foreign financial institutions enter into disclosure agreements with the U.S. Treasury. . . .