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December 7th, 2020

Double Taxation Agreement Botswana

Both countries generally use the credit method to eliminate double taxation. In addition, a tax savings credit is provided for tax exemptions that may be exempted or reduced in accordance with laws establishing economic development systems in Botswana or Zambia, provided that these schemes have been the subject of a common agreement between the competent authorities of the contracting states, since they are eligible for the purposes of the provision. The contract includes income tax in Botswana, including the taxation of capital income and income tax for Zambians. A tax credit is granted unilaterally when money collected by a Botswana resident has been taxed in a foreign country and in cases where a double taxation agreement (DBA) has been concluded. A tax credit is also granted when income from a source in Botswana is subject to a WHT. The amount of the tax reduction is limited to the lower amount of tax paid per deduction and the tax normally paid in Botswana on these incomes. According to local media, the previous agreement was obsolete and did not foresee any change in the concept of international taxation. The Ministry of Finance confirmed this in a statement and stated that the new DBA contained tax savings clauses and that it exercised the tax effects of income distribution when a company carries out part of its business in one country and part of the other country. Last week, it was reported that Botswana and South Africa had signed a new agreement to avoid double taxation, which would replace the treaty signed between the two countries in 1978. In a statement from Botswana`s Ministry of Finance, signed earlier this month by South African Finance Minister Trevor Manuel and Botswana`s Minister of Financial Planning and Development, he said: “The main task of the agreement is to remove tax barriers to bilateral trade and investment.” Under the new agreement, the scope of an establishment has been extended to include construction, assembly and/or facilities, as well as services provided by employees. The agreement to avoid double taxation between Botswana and the United Kingdom was approved by African state legislators in January 2006. The agreement was signed in Gaborone on 9 September 2005 and came into force on 4 September 2006.

Double taxation agreement with Belgium, China, Luxembourg. Malawi and Tanzania are awaiting ratification. Discussions on possible tax agreements are taking place with Angola, Kenya, Nigeria, Uganda and Japan.

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