Am I liable for tax in SA on my overseas income? | Fin24
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Am I liable for tax in SA on my overseas income?

Oct 01 2015 14:27

Cape Town - To help make the filing process as seamless as possible Fin24 has joined forces with the SA Institute of Tax Professionals (SAIT), to answer users' tax questions as far as possible.

User question: I currently live overseas. I have returned to SA September 11 and will be working remotely in SA for my overseas employer from then until the end of March.

I am a SA taxpayer as I have a rental apartment there, however I have not lived in SA for about 8 years. The rental income is the only income I pay tax on in SA. I was also in SA this tax year over Easter for a 3-week holiday.

My question is will I be liable to pay tax in South Africa on my overseas income in the Mar15/Feb16 tax year? There is a double tax agreement/treaty between my current country of residence and SA.

Piet Nel, SA Institute of Tax Professionals responds:

This is a complex part of the tax law and we really need to know in what country the work will be done. You may well want to consult a tax practitioner.

For purpose of the guidance that follows we assume that you are, in terms of the treaty, NOT a person who is deemed to be exclusively a resident of another country for purposes of the application of any agreement entered into between the governments of the RSA and that other country for the avoidance of double taxation. 

The fact that you derive rental income will not influence your status as a tax resident. Not having “lived in SA for about 8 years” on its own will also not change your resident status.

On the basis of the assumption, the remuneration earned in the other country will be gross income in the RSA. It may qualify for the section 10(1)(o)(ii) exemption. 

That requires that the services are rendered outside the RSA for a period in excess of 183 days in a 12 month period and where the absence from the RSA includes a continuous absence of at least 60 days.  It is unlikely that the treaty will provide differently.  

* Have a question? Send it to us and we will find an expert to answer.

PLEASE NOTE: The important deadline dates in the 2015 tax season are:

September 30 2015: Manual/postal submissions
November 27 2015: At a SARS branch (non-provisional)
November 27 2015: eFiling (non-provisional)
January 29 2016: Provisional taxpayers via eFiling

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sait  |  tax filing season 2015  |  money clinic  |  tax


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