The following description assumes that the investor’s participation forms part of his private assets, and he does not have US citizenship, is not regarded resident in the USA nor has any other assets in the USA.

Since there is a Double Taxation Treaty between South Africa and the USA, profits from direct participations have been subject to US income tax and are therefore exempt from taxation in South Africa. They are subject only to the reservation that progressive tax rates in South Africa will apply. In the USA profit shares from participations are taxed on the pro rata income of the individual participants, as is the case under South African law.

Current non-citizen, non-resident taxation rates lie between 10% on a taxable income of up to US$6,000 and 39.6% on a taxable income exceeding US$148,675. There are, however, significant write-off options under US law:

	average of 14.29% p.a. for 7 years for the value of capital goods
	15% p.a. on reductions in output (depletion)
	US$3,000 tax free lumpsum

As a rule of thumb, albeit without guarantee, it is fair to assume that for investments up to US$40,000 there is little if any tax exposure for our participation partners. Yet we do recommend the involvement of a tax consultant when it comes to the evaluation of the individual tax and legal circumstances of the projects and most especially when there are also other assets in the USA.

Each participant is obliged to apply to the US tax authorities for a tax number. AMTEX Oil & Gas Inc. or its partners in Germany and South Africa can assist with obtaining and completing the requisite form. Tax declarations may be made through our American tax consultants (CPA).

See also under “Benefits and Securities”.