Cabinet has approved the submission of the Multilateral Convention to Implement Tax Treaty related measures to prevent Base Erosion and Profit Shifting (BEPS MLI) to Parliament for ratification.

Cabinet, following its meeting on Thursday, said South Africa, as one of the 95 countries participating in the convention initiated by the Organisation for Economic Cooperation and Development (OECD) to reduce opportunities for tax avoidance and base erosion by multinational companies, signed the tax treaty in June 2017.

“Once the tax treaty is ratified, South Africa will apply it alongside other tax treaties it has signed with other countries,” reads the statement.

Cabinet said South Africa, as a member of the OECD, was “committed to working with other countries to stop company profits being artificially shifted out of the country to low or no tax environment”.

In the same meeting, Cabinet approved the submission of the amended Tax Treaty Protocol signed between South Africa and Kuwait to Parliament.

Amendments to this treaty, which came into force in 2006, were made and signed in 2021.

“The tax protocol deals with the avoidance of double taxation and prevention of fiscal evasion with respect to taxes on income between the two countries.

“Apart from dealing with tax evasion, such treaties seek to encourage tax transparency between countries,” the statement reads.

Source: South African Government News Agency