Sadc Model Double Taxation Agreement

In order to encourage investment in the CDAA region, many Member States have developed specific tax incentives and signed mutually beneficial agreements that reduce corporate taxation and thus create an attractive climate for trade and industry, including the following incentives: under the above-mentioned agreement, the CDAA recognises the usefulness of common tax approaches in terms of the dissemination of tax information. stimulate investment. This is why Member States agree to set up and maintain a regular online tax database that would provide comprehensive information on their national tax structures. They will also develop the expertise of their tax officials, with the support of training programmes and seminars on tax development, policy and best practices. In addition, Member States adhere to cooperation on tax incentives that encourage investment, not those that reduce transparency or simply act as an instrument for reducing taxation. Through these measures, the CDAA aims to create a clear and transparent tax system throughout southern Africa that harmonizes policies to avoid barriers to investment and avoid double taxation. In 2002, the CDAA published its Memorandum of Understanding on Tax Cooperation and Related Issues for a Common Tax Policy. This document outlines the CDAA`s tax policy regarding the ultimate objectives of economic development and regional integration. It is also included in Schedule 3 of the Financing and Investment Protocol.

Many Member States also enter into bilateral tax agreements with other countries within and outside the CDAA region. With the increase in international trade, there are opportunities for accidental double taxation or, unknowingly, one Member State to set up an excessively favourable tax regime at the expense of development in another Member State. That is why the memorandum recommends that all CDAA Member States agree on a model of agreement on taxation, which will serve as a common policy for international partners. Member States also agree to ensure that information, such as . B of the CDAA`s tax database and the information portal are widely available to avoid accidental tax inequities. The main objective of the cooperation agreement in the areas of taxation and related issues was the creation of the tax database. This database provides detailed information on the tax policies of each CDAA member state. This joint declaration of intent provides for Member States to regularly provide up-to-date information on all of their direct and indirect taxes, applicable rates and tax introduction dates. The tax database also specifies all tax exemptions and incentives, including specific dates and conditions that apply. Individual pages of each Member State show which bilateral tax agreements they belong to and include statistical breakdowns of that country`s tax revenues, which are considered direct and indirect levies.