The tax credit provision in section 6quin will be revoked and as a result, tax leakage on cross-border service fees is likely to increase. 

Section 6quin was introduced in 2012 to allow South Africa taxpayers to claim a tax credit for foreign tax withheld on amounts relating to services rendered in South Africa. It is available both where foreign tax is correctly withheld and where foreign tax is incorrectly withheld, eg in contravention of a treaty. Once the provision is revoked, taxpayers will potentially have no relief for foreign tax that is incorrectly withheld, other than time-consuming and uncertain mutual assistance procedures where treaties exist, and they will only be entitled to claim a tax deduction (not a credit) for tax that is correctly withheld in respect of amounts relating to services rendered in South Africa.