Can a trust be regarded as a person for purposes of a double-taxation agreement to which South Africa is a party?

Authors Izelle du Plessis

ISSN: 1996-2177
Affiliations: Senior Lecturer, University of Stellenbosch
Source: South African Law Journal, Volume 134 Issue 4, 2017, p. 907 – 927


Like so many other entities, trusts often do not function only in one jurisdiction. They may be employed in international transactions, and therefore the trust runs the risk of international double taxation, as do the parties to the trust. South Africa has developed a law of trusts that is unique to this country. It therefore has to be determined how a court would interpret and apply the provisions of a double-taxation agreement, patterned on the OECD Model Tax Convention and to which South Africa is a party, to such a trust. This article explores whether a trust may be regarded as a person for purposes of such a double-taxation agreement. If a trust cannot show that it is a person in terms of the relevant double-taxation agreement, it will not be able to claim the benefits of the agreement. Although it is concluded that a trust will be regarded as a person from a South African perspective, recommendations are made which will put the matter beyond doubt.