Potential double tax treaty override of South African exit taxation law – how do tax treaties allocate the right to tax unrealized gains?

Abstract: South African income tax legislation makes provision for the levying of exit taxes or charges when individuals emigrate from or companies cease to be residents or become headquarter companies, or when controlled foreign companies (CFC) cease to be CFCs otherwise than by way of becoming residents. As indicated by the title the discourse followed in this paper entails the analysis of treaties to ascertain the connecting factors employed by the OECD Model treaty giving rise to signatories levying exit taxes. Furthermore, using decided cases, the DTTs entered into by South Africa with other countries in the international community are scrutinised to assess whether they are at threat of being circumvented by domestic tax provisions on exit taxation in South Africa.