Corporate Entities: Dual Residency Determination

ON 17 JULY 2015.

Corporate Entities: Duel Residency Determination

On 22 May 2015, a memorandum of understanding was entered into between the South     African Revenue Service and the Mauritius Revenue Authority. This memorandum states that where a corporate entity is a tax resident in both South Africa and Mauritius any benefits permitted in terms of the Double Taxation Agreement between both countries will only be available upon the mutual agreement of the revenue authorities as to:

· the tax residency of the entity; and

· the extent of tax relief available.

A corporate entity can be regarded tax resident in two tax jurisdictions due to it being       incorporated or formed in one country but effectively managed in another country. In terms of the memorandum the following factors will be taken into account in determining the     residency status of an entity:

Therefore where a corporate entity has been incorporated or formed in Mauritius it is        imperative that such entity’s operations or activities (taking into account the factors noted above) indicate that its place of effective management is also Mauritius.

Prepared By:

PKF Chartered Accountants and Business Advisors:

Kubashni Moodley (Director—Tax)