August 25, 2022

SADC steps up efforts to advance the Network of Double Tax Avoidance Agreements (DTAA) between Member States

The Southern African Development Community (SADC) Secretariat has stepped up activities to facilitate negotiations of Double Tax Avoidance Agreements (DTAA) between Member States as part of the efforts to increase the network of DTAA and foster an aligned tax treaty policy across Member States.

This will take into account developments both at regional and international levels, in particular, those related to Base Erosion and Profit Shifting (BEPS) issues.

SADC Ministers of Finance and Investment approved the revised SADC Model on Double Taxation Avoidance Agreement and its Commentary at their meeting in Johannesburg, South Africa, in July 2018.To date, there are 59 DTAAs in force among SADC Member States.

A DTAA is a tax treaty signed between two or more countries to help taxpayers avoid paying double taxes on the same income. A DTAA becomes applicable in cases where an individual is a resident of one nation, but earns income in another.

Recently, through the support of the Support to Improving the Investment and Business Environment (SIBE) Programme, SADC facilitated two negotiations of DTAA, one between the Kingdom of Lesotho and the Republic of Malawi in May and June, 2022 and the other between the Republic of Botswana and the Republic of Mauritius in August, 2022. Both negotiations were preceded by a capacity building session. The overall objective of this assignment is to create an enabling investment and business environment in the Region through harmonisation and cooperation among Member States in tax and related matters. Further, this is in fulfillment of one of SIBE’s Result Area of supporting an enabling investment policy framework across SADC Member States which includes enhancing the SADC tax regime in support of a conducive investment and business environment.

These negotiations represent an important step in increasing this number and fostering an aligned tax treaty policy across Member States, that can facilitate regional investment and business environment, as well as capacitate Member States to face the latest in the developments in the international tax field and tackle the challenges resulting from the digitalised economy.