Mauritius has, in recent years, become one of the preferred financial centres owing to its business-friendly economy, preferential tax regime, wide tax treaty network and solid infrastructure. The Mauritian economy and people have greatly benefitted from the country’s success as a financial centre. One benefit offered by the Mauritian tax regime is the ability and ease with which a person can gain residency to access the preferential tax rates that the country offers. South Africa has recently re-introduced a headquarter tax regime, which will make it a competitor with Mauritius for channelling international trade and foreign direct investment. Previous research focuses on the elements of international taxation and highlights some of the benefits that a company could enjoy by using Mauritius as an offshore base. One of the key elements of a successful headquarter company regime is that of a wide tax treaty network which offers preferential terms for taxing certain income classes. The aim of this study is to provide a theoretical construct for the comparison of double tax agreements, with the goal of identifying those that provide preferential terms for the taxation of certain income classes and the elimination of double taxation. This study focuses on the double tax agreements between South Africa, Mauritius and China, highlighting some of the deficiencies of the South African agreement with China and comparing those with Mauritius’s agreement with China. These deficiencies and the preferential tax regime that Mauritius offers will inevitably provide multi-national companies with tax saving opportunities if they use Mauritius as an offshore base. This study will point out some of the areas where possible tax saving opportunities could be identified. The study further aims to provide a platform from which the South African headquarter company regime can be assessed and analysed. This is specifically important if South Africa is to compete with Mauritius. AFRIKAANS : Mauritius het in onlangse jare een van die gekose finansiële sentrums geword as gevolg van hul besigheidsvriendelike houding, voordelige belasting regime, hul wye netwerk van dubbelbelastingooreenkomste en gevestigde infrastruktuur. Die ekonomie van Mauritius en Mauritius se bevolking het baie voordeel getrek uit die sukses van Mauritius se finansiële dienste sektor. Een van die voordele wat Mauritius se belasting regime bied is die gemaklikheid waarmee inwonerstatus bekom kan word en ‘n persoon toegang tot Mauritius se voordelige belastingkoerse kan kry. Suid-Afrika het soortgelyks verlede jaar ‘n internasionale hoofkantoor regime bekendgestel wat Suid-Afrika dus ‘n mededinger met Mauritius gaan maak ten opsigte van die kanalisering van internasionale fondse en buitelandse belegging. Vorige navorsing fokus op die beginsels van internasionale belasting en identifiseer voordele wat maatskappye kan geniet indien hulle van Mauritius gebruik maak as hul buitelandse basis. Een van die belagrike elemente van ‘n suksesvolle hoofkantoor maatskappy regime is dat die regime ‘n wye netwerk van dubbelbelastingooreenkomste bied en dat die dubbelbelastingooreenkomste voordelige terme vir die belasting van sekere inkomste klasse bied. Hierdie studie se doelwit is om ‘n teoretiese platform te vestig vir die vergelyking van dubbelbelastingooreenkomste met die oog om dubbelbelastingooreenkomste te identifiseer wat voordelige terme bied vir die belasting van sekere inkomste klasse en die eliminering van dubbele belasting. Hierdie studie fokus op die dubbelbelastingooreenkomste tussen Suid-Afrika, Mauritius en Sjina in ‘n poging om sekere van die tekortkominge van die dubbelbelastingooreenkoms tussen Suid-Afrika en Sjina uit te wys wanneer dit met die dubbelbelastingooreenkoms tussen Mauritius en Sjina vergelyk word. Hierdie tekortkominge en die voordelige belasting regime wat Mauritius bied sal multi-nasionale maatskappye die geleentheid bied om belastingvoordele te ontgin indien hulle van Mauritius gebruik maak as ‘n buitelandse basis. Hierdie studie sal van die areas identifiseer waar ‘n maatskappy moontlik belasting kan bespaar. Die studie poog ook om ‘n platform te bewerkstellig vir die analise en evalueering van die Suid-Afrikaanse hoofkantoor regime. Hierdie analise en evalueering is spesifiek belangrik indien Suid-Afrika met Mauritius wil meeding. Copyright 2011, University of Pretoria. All rights reserved. The copyright in this work vests in the University of Pretoria. No part of this work may be reproduced or transmitted in any form or by any means, without the prior written permission of the University of Pretoria. Please cite as follows: Van den Berg, A 2011,A comparative study of double tax agreements between South Africa, Mauritius and China, MCom dissertation, University of Pretoria, Pretoria, viewed yymmdd < http://upetd.up.ac.za/thesis/available/etd-03222012-172313 / > F12/4/180/gm / Dissertation (MCom)--University of Pretoria, 2011. / Taxation / unrestricted

Death and taxes are unavoidable. In terms of the current legislation both estate duty and capital gains tax (hereinafter referred to as 'CGT') are levied upon death. The South African National Treasury is reconsidering taxes on death as estate duty contributes minuscule revenue, and its administration is cumbersome. Worldwide taxation is based on either source or residence. Because of the R3 500 000 exemption from estate duty, only wealthy individuals are generally subject to estate duty. Wealthy individuals make use of the annual R4 000 000 foreign investment capital allowance by owning offshore property. The aim of this study is to document how death taxes are currently levied on an estate which holds offshore property, given the perception that foreign property is exempt from death duties, and also to consider the impact on taxes payable on offshore property at death if estate duty were to be abolished. These objectives cannot be achieved without a thorough understanding of the development and future of estate duty, the impact of CGT on death, how selected foreign countries levy taxes upon death, and how residents of South Africa are taxed on property situated within foreign countries. When CGT was introduced in 2001 the estate duty rate was reduced and it is likely that, if estate duty is repealed, the rate of CGT will be increased. In South Africa, residents are taxed on worldwide income and capital gains. The international perspective is that the foreign country has the sovereignty to levy taxes on a person who owns property situated within its boundaries. An estate which holds offshore property may also be subject to estate duty in terms of the tax law of that country which results in double taxation in the hands of the deceased estate. South Africa has concluded international agreements with a number of foreign countries through double tax agreements and estate tax treaties to prevent double taxation. In terms of the Estate Duty Act, and in some of the treaties, a rebate is allowed in respect of foreign estate taxes paid. However, if estate duty is abolished, the deceased estate may be liable for estate tax in the foreign country where the assets are situated and the deceased estate may not qualify for any rebate in South Africa in respect of foreign taxes paid. Hence, the abolition may have detrimental consequences on the liquidity requirements, and on the heirs, in cases where offshore property is involved. It is vital that proper estate and tax planning advice is given before a resident acquires offshore property as the tax implications may be enormous. The current impact of estate duty and CGT on a resident who owns offshore assets is that the said taxes will be levied either here in South Africa or in the foreign country. The effect of capital transfer tax on a resident with an offshore asset can never be underestimated. / Thesis (M.Com. (Tax))--North-West University, Potchefstroom Campus, 2011.

Death and taxes are unavoidable. In terms of the current legislation both estate duty and capital gains tax (hereinafter referred to as 'CGT') are levied upon death. The South African National Treasury is reconsidering taxes on death as estate duty contributes minuscule revenue, and its administration is cumbersome. Worldwide taxation is based on either source or residence. Because of the R3 500 000 exemption from estate duty, only wealthy individuals are generally subject to estate duty. Wealthy individuals make use of the annual R4 000 000 foreign investment capital allowance by owning offshore property. The aim of this study is to document how death taxes are currently levied on an estate which holds offshore property, given the perception that foreign property is exempt from death duties, and also to consider the impact on taxes payable on offshore property at death if estate duty were to be abolished. These objectives cannot be achieved without a thorough understanding of the development and future of estate duty, the impact of CGT on death, how selected foreign countries levy taxes upon death, and how residents of South Africa are taxed on property situated within foreign countries. When CGT was introduced in 2001 the estate duty rate was reduced and it is likely that, if estate duty is repealed, the rate of CGT will be increased. In South Africa, residents are taxed on worldwide income and capital gains. The international perspective is that the foreign country has the sovereignty to levy taxes on a person who owns property situated within its boundaries. An estate which holds offshore property may also be subject to estate duty in terms of the tax law of that country which results in double taxation in the hands of the deceased estate. South Africa has concluded international agreements with a number of foreign countries through double tax agreements and estate tax treaties to prevent double taxation. In terms of the Estate Duty Act, and in some of the treaties, a rebate is allowed in respect of foreign estate taxes paid. However, if estate duty is abolished, the deceased estate may be liable for estate tax in the foreign country where the assets are situated and the deceased estate may not qualify for any rebate in South Africa in respect of foreign taxes paid. Hence, the abolition may have detrimental consequences on the liquidity requirements, and on the heirs, in cases where offshore property is involved. It is vital that proper estate and tax planning advice is given before a resident acquires offshore property as the tax implications may be enormous. The current impact of estate duty and CGT on a resident who owns offshore assets is that the said taxes will be levied either here in South Africa or in the foreign country. The effect of capital transfer tax on a resident with an offshore asset can never be underestimated. / Thesis (M.Com. (Tax))--North-West University, Potchefstroom Campus, 2011.