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A Fin24 user who is returning to South Africa after a long stint of working abroad is worried about tax on dividend earnings. He writes:
I have been working abroad for the last 20 years during which time I have been not ordinarily resident in South Africa, which means that my offshore income has not been taxable in this country. I will shortly be returning permanently to South Africa and will become ordinarily resident by virtue of the definition.
I am concerned about falling into the provisional taxpayer net on the basis of local and overseas dividend and interest earnings which would classify me as a provisional taxpayer.
1. Do South African dividends still count towards qualification for provisional tax?
2. Are foreign dividends and foreign interest considered as well as local dividends and interest when it comes to calculating threshold liability for provisional tax?
Tony Davey of Tony Davey & Associates responds:
A resident is liable for tax on income on a worldwide basis.
As regards provisional tax, interest (foreign and/or local) and foreign dividends (as distinct from local dividends) which aggregated, exceed R20 000 per annum, triggers provisional tax registration. (Different criteria apply for persons 65 and older.)
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