Protocol

It is understood that if the competent authorities of the Contracting States, by mutual agreement, have reached a solution within the context of the Convention, for cases in which double taxation or double exemption would occur:

this solution — after publication thereof by both competent authorities — shall also be binding in other similar cases in the application of the provisions of the Convention.

An individual living aboard a ship without any real domicile in either of the Contracting States shall be deemed to be a resident of the Contracting State in which the ship has its home harbour.

It is understood that exploration and exploitation rights of natural resources shall be regarded as immovable property situated in the Contracting State the seabed and subsoil of which they are related to, and that these rights shall be deemed to pertain to the property of a permanent establishment in that State. Furthermore, it is understood that the aforementioned rights include rights to interests in, or to the benefits of, assets to be produced by such exploration or exploitation.

In respect of paragraphs 1 and 2 of Article 7, where an enterprise of a Contracting State sells goods or merchandise or carries on business in the other Contracting State through a permanent establishment situated therein, the profits of that permanent establishment shall not be determined on the basis of the total amount received by the enterprise, but shall be determined only on the basis of that portion of the income of the enterprise that is attributable to the actual activity of the permanent establishment in respect of such sales or business. Specifically, in the case of contracts for the survey, supply, installation or construction of industrial, commercial or scientific equipment or premises, or of public works, when the enterprise has a permanent establishment, the profits attributable to such permanent establishment shall not be determined on the basis of the total amount of the contract, but shall be determined only on the basis of that part of the contract that is effectively carried out by the permanent establishment in the Contracting State where the permanent establishment is situated. The profits related to that part of the contract which is carried out by the head office of the enterprise shall be taxable only in the Contracting State of which the enterprise is a resident.

Payments received as a consideration for technical services, including studies or surveys of a scientific, geological or technical nature, or for consultancy or supervisory services shall be deemed to be payments to which the provisions of Article 7 apply.

In respect of paragraph 1 of Article 9, it is understood that the fact that associated enterprises have concluded arrangements, such as cost sharing arrangements or general services agreements, for or based on the allocation of executive, general administrative, technical and commercial expenses, research and development expenses and other similar expenses, is not in itself a condition as meant in that paragraph.

Where tax has been levied at source in excess of the amount of tax chargeable under the provisions of Articles 10, 11 or 12, applications for the refund of the excess amount of tax have to be lodged with the competent authority of the State having levied the tax, within a period of three years after the expiration of the calendar year in which the tax has been levied.

It is understood that income received in connection with the (partial) liquidation of a company or a purchase of own shares by a company is treated as income from shares and not as capital gains.

It is understood that if the individual referred to in paragraph 5 of Article 13 is subject to tax on gains in the circumstances envisaged in that paragraph and the shares, ‘jouissance’ rights or debt-claims were acquired before the individual became a resident of the first-mentioned State, that first-mentioned State shall consider that portion of the tax determined in accordance with the following formula to have been paid:

A = (X/Y) × Z

Where:

A = the amount of tax considered as paid;

X = the period of ownership during which the individual was not a resident of the first-mentioned State;

Y = the total period of ownership;

Z = the tax on the assessment.

This provision will only apply if the gain taxed in the first-mentioned State includes accrual of value during a period in which the individual was not a resident of that State.

It is understood that ‘bestuurder’ or ‘commissaris’ of a Netherlands company means persons who are nominated as such by the general meeting of shareholders or by any other competent body of such company and are charged with the general management of the company and the supervision thereof, respectively.

Notwithstanding the provisions of Article 17, where a person who is a resident of South Africa on the date on which the Convention comes into effect, continues after that date to derive a pension or other similar remuneration or an annuity as meant in paragraph 1 of Article 17, or continues after that date to derive a pension or other payment paid as meant in paragraph 2 of Article 17, that income shall be taxable only in South Africa if the total gross amount of that income paid out in any calendar year does not exceed 10.000 Euro. However, if the total gross amount of that income arising in the Netherlands and paid out in any calendar year exceeds 10.000 Euro, then it may also be taxed in the Netherlands, but only to the extent that the total gross amount exceeds 10.000 Euro. In that case the Netherlands may include in the basis upon which its tax is imposed on that income that part thereof that is taxable only in South Africa and shall exempt that part by allowing a reduction of its tax in conformity with the provisions of paragraph 2 of Article 23.

It is understood that for the computation of the reduction mentioned in paragraph 2 of Article 23, the items of capital referred to in paragraph 1 of Article 22 shall be taken into account for the value thereof reduced by the value of the debts secured by mortgage on that capital and the items of capital referred to in paragraph 2 of Article 22 shall be taken into account for the value thereof reduced by the value of the debts pertaining to the permanent establishment.

It is understood that nothing in this Article shall prevent South Africa from imposing on the profits attributable to a permanent establishment in South Africa of a company — which is a resident of the Netherlands — a tax at a rate which does not exceed the rate of normal tax on companies by more than five percentage points.

It is further understood that the provision of paragraph 1 shall only apply as long as permanent establishments of companies which are not residents of South Africa are not liable to the secondary tax on companies.

It is furthermore understood that the provision of paragraph 1 shall no longer apply if South Africa were to abolish the secondary tax on companies or if it were to levy this tax on residents of South Africa at a rate of less than five percentage points.

IN WITNESS WHEREOF the undersigned, duly authorised thereto, have signed this Protocol.

DONE at Pretoria in duplicate, in the English language, this 10th day of October 2005.