Alexandra Kristina Wohlert Doppelbesteuerung bei deutsch-südafrikanischen Erbfällen

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South Africa has become a popular travel destination amongst Germans, and more and more German residents live their dream of owning immovable property in South Africa. However, where a German resident passes away and a property situated in South Africa is included in that person’s deceased estate, the relevant laws in both countries may apply, potentially resulting in double taxation due to the different legal systems applied in Germany and South Africa.

While the Germany applies an inheritance tax system, which focuses on the improvement of the heir’s economic position, levies South Africa a tax on the deceased’s estate, which basically has the effect of a final tax on the deceased persons. In addition to this, South Africa also taxes the capital gain on the deceased’s assets in terms of the South African capital gains tax, which forms part of the income tax system.

The author addresses the issue of double taxation relating to estate duty as well as income tax, which may arise in the case of cross-border deceased estates, and she demonstrates two options for avoiding such double taxation.

Firstly, in addition to tax related issues, the civil law aspects of the deceased estate are discussed, from a South African perspective – specific consideration is thereby given to the fideicommissum and the trust, both of which do not exist under German estate laws.

Thereafter follows a discussion of the main focus point of the dissertation, is the question relating to the avoidance of double taxation. Due to the lack of any bilateral regulations, the unilateral credit rule provided in § 21 ErbStG is discussed. In this regard, the question whether the Capital Gains Tax may be considered to be a tax comparable to the German estate duty is debated in particular.

Furthermore, an enquiry is made into whether respective taxes levied in South Africa may qualify as a estate duty liabilities are therefore eligible for deduction from German estate duty.

Finally, the provisions of the double taxation agreement between Germany and South Africa are discussed in respect of the potential double taxation of the transfer of at least 1% of the shares in a company, which may occur in terms of § 6 Abs. 1 Satz 2 Nr. 1 2. Alt. AStG.