The double taxation agreement (DTA) signed in 2022 by Hong Kong and Mauritius came into force in Mauritius in August 2023.
South Africa’s treasury will bring forward legislation requiring non-resident employers who have a permanent establishment in South Africa to deduct tax from South African employees’ remuneration tax.
Arabia
Qatari income tax law amendments gazetted in February 2023 brought various forms of foreign-source income under taxation. The amendments also introduced new economic substance and beneficial ownership reporting requirements.
In April 2023, the United Arab Emirates (the UAE) approved an amended DTA with Switzerland, implementing the OECD base erosion and profit shifting minimum standards.
The Saudi Arabian government approved with immediate effect amendments to its income tax bylaws and Zakat regulations in September 2023. The amendments affect the allowable interest charge, employers’ contributions to retirement funds, the tax dispute appeal process and withholding tax rates.
Saudi Arabia’s tax authority is proposing new withholding tax exemptions. It has also begun a consultation on a complete overhaul of the jurisdiction’s corporate income tax law.
Israel
Israel’s 2023/24 budget legislation, published in March 2023, proposed that taxpayers who dispute an assessment issued by the Israel Tax Authority must pay 30 per cent of the disputed tax in advance, when filing their court documents.
Regulation
Africa
In January 2023, the Financial Action Task Force (the FATF) published mutual evaluation reports on Kenya and Namibia. It recommended that Kenya should prioritise investigation and prosecution of money laundering and Namibia should focus on regulation of virtual asset service providers.
Compulsory registration of trust and company beneficial ownership took effect in South Africa on 1 April 2023. Trustees are required to disclose the beneficial ownership of trusts and to keep this information up-to-date. Enforcement proceedings against non-compliant entities began on 1 October 2023.
Zimbabwe joined the OECD Global Forum on Transparency and Exchange of Information for Tax Purposes in April 2023, becoming its 167th member and the 26th African country to join. It has also joined the OECD Africa Initiative.
The FATF issued a follow-up report in June 2023 noting the Seychelles’ progress in resolving some of the technical compliance deficiencies identified in its 2018 mutual evaluation. The Seychelles’ Beneficial Ownership Act 2020 came into force in August 2023.
Arabia
The FATF has found that Qatar has a very strong technical compliance with its recommendations for anti-money laundering (AML) measures, with good progress in collecting beneficial ownership information for its unified register.
A follow-up report from the FATF rated the UAE as compliant with 15 of its 40 recommendations and largely compliant with a further 24.
Digital Assets
Africa
In February 2023, the FATF raised Mauritius’ rating on Recommendation 15, concerning virtual asset regulation, to largely compliant. Mauritius remains in the FATF’s enhanced follow-up process.
Arabia
Dubai’s Virtual Asset Regulatory Authority (VARA) has issued regulations explaining how it intends to deploy the regulatory authority given to it by Law No.4 of 2022 Regulating Virtual Assets in the Emirate of Dubai.
Israel
In August 2023, Israel’s parliament approved the initial reading of a draft Bill exempting expatriates and other foreign residents from capital gains tax on cryptocurrency disposals. The Bill aligns crypto bonuses with share options and cuts the current 50 per cent tax rate to 25 per cent.
Residency
Africa
In June 2023, the South African Revenue Service and the South African Reserve Bank introduced new controls on the procedures used by resident individuals to transfer their funds overseas.
Arabia
A personal status law to administer the matrimonial and succession affairs of non-Muslim expatriate residents of every emirate in the UAE took effect on 1 February 2023.
The UAE Ministry of Finance has issued a clarification on the conditions needed for a natural person to qualify as UAE tax resident, with effect from 1 March 2023.
Trusts
Africa
South Africa’s 2023 budget removed the tax-free flow-through of income to non-resident beneficiaries of a resident trust. Instead, income received by or accrued to resident trusts in the hands of the trust will be taxed, as is already done for a trust’s capital gains. The budget also disallowed tax avoidance schemes using third-party backed shares and schemes where foreign intermediary holding companies become tax-resident in South Africa to obtain tax-free capital distributions.
Arabia
The UAE has enacted a decree establishing a newly developed regulatory framework for the administration of trusts within the UAE, including increased transparency. A system for the official registration of trusts has been established, including the issuing of a validity certificate and an incorporation certificate by the adequate authority.
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