Chibuku Products LTD vs Malawi Revenue Authority

Abstract

This case concerns the legal interpretation and application of double taxation treaties (DTAs) between Malawi and the Netherlands, and Malawi and the UK, in relation to the taxation of management fees paid by a multinational corporation, SABMiller. The Appellant argued for the applicability of the Malawi/Netherlands DTA, claiming that management fees should be exempt from withholding tax, while the Respondent contended that the Malawi/UK DTA should apply, which explicitly excludes management fees from exemption. The Court analyzed the treaties’ language, the entities’ residency status, and the nature of the corporate arrangements, including whether SABMiller management BV is a sham company. The Court ultimately dismissed the appeal, holding that the Malawi/UK DTA was more appropriate given the evidence of control and the entities’ operational independence, and confirmed that the Malawi/Netherlands DTA excludes management fees from tax exemption. The case underscores the importance of treaty interpretation, the principles of good faith in international law, and the delineation of corporate responsibilities in cross-border taxation.