South Africa is changing its system of taxing dividends paid to non-residents and introducing withholding tax (WHT). A protocol to this treaty is therefore being introduced in order to deal with this change. If the benefi cial owner of the dividend paid is a company that holds 10% or more of the capital of the paying company the rate of WHT charged will not exceed 5%, for qualifying dividends paid by property investment companies WHT may not exceed 15% and in all other cases WHT is limited to 10%. An exchange of information clause has also been introduced.

The protocol entered into force on October 13, 2011 and will take effect in both countries in respect of dividends from the date that South Africa changes its system of taxation at the shareholder level and for the other provisions from October 13, 2011.