Tag: foreign income

South Africa’s tax base continues to evolve in striking ways. Recent South African Revenue Service (SARS) figures show a growing trend. The number of individuals registered for tax increased from 25.9 million in 2023 to 27.1 million in 2024. Yet, only 7.6 million of these individuals were expected to file a return.

Expatriate tax is complex, intricate and can be challenging to understand – especially if one does not have the basics, such as what is an expat, down pat. Simply, an expatriate, or expat, is an individual who has relocated from their home country to another, either temporarily or permanently.

The South African Revenue Service (SARS) has also announced many changes to this upcoming filing season and has already begun auto-assessing taxpayers from 1 July 2023. These changes must be clearly understood by taxpayers, so they can compliantly navigate this year’s filing season.

To be released from their local tax obligations in relation to foreign income, emigrating South Africans must be able to prove to the South African Revenue Service (SARS) that they have permanently left the country.

Whether working abroad or still hunting for jobs overseas, the possibility of a financial emigration always hits centre stage at some point. Tax is inherently complex, but once you start crossing borders it becomes an ever-changing calculation that can easily render void the benefits of earning a foreign income, which was possibly the reason why you chose to work abroad in the first place.

South Africa’s exchange control regime has relaxed considerably over the last few years, but the most recent amendments have created widespread confusion around the definition of non-residency for exchange control purposes. In particular: When is a person non-resident for exchange control in South Africa? How do they cease to be resident for exchange control purposes? And what does all this mean?

Post-COVID-19 economic resurgence saw an increase in international work opportunities. With skills in hand, many South African professionals have become sought-after in other countries. As a result, their finances and subsequent taxation have come under scrutiny. However, along with the awareness of tax complications, another threat has emerged.

As 28 February 2021 looms near on the horizon, so too does the deadline for the second provisional tax submissions for 2021. This February will be the most important tax submission to date for expatriates earning above the R1.25 million threshold as they will now be exposed to a previously non-existent tax liability in South Africa.

The hotly debated amendment to Section 10(1)(o)(ii) or 'Expatriate Exemption' took effect from 1 March 2020, with the questions on many expatriates’ minds often being 'how will SARS find me? What does the SARS audit of an expatriate look like and what questions should I expect?'