Japan's Ministry of Finance has issued a notice regarding the application of the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI) to the 1997 income tax treaty with South Africa. A summary on the application of the MLI to the Japan-South Africa tax treaty has also been published, noting that the MLI generally applies for the treaty from 1 January 2023 with respect to withholding taxes and from 1 July 2023 with respect to other taxes.

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Tax Treaties Covered by the Convention to Implement Measures to Prevent BEPS will be Increased [ South Africa ]

1. According to the publication as of October 6, 2022 by the Secretary-General of the Organisation for Economic Co-operation and Development (OECD) acting as the Depositary of the "Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting" (Convention to Implement Measures to Prevent BEPS), South Africa, being a party to one of the tax treaties of Japan to which it had chosen to apply this Convention, newly deposited its instrument of ratification, acceptance or approval of this Convention.

2. This Convention applies to an existing tax treaty where both parties to that tax treaty have chosen to apply this Convention to it and where this Convention has entered into force for those parties. The tax treaty between Japan and South Africa will satisfy those requirements on January 1, 2023.

3. The provisions of this Convention applicable to an existing tax treaty and the timing of entry into effect of this Convention for it are determined depending on the choices of each of the parties to that tax treaty.