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Clarifying the law on working abroad

Aug 25 2015 07:57

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 am a South African Resident working abroad. I have had a look at a comment that was made on fin24, dated 2nd July 2015 03:04, which reads:
"This would apply if you have been outside South Africa for a period or periods exceeding 183 full days in aggregate during any 12 month period and for a continuous period exceed 60 full days and the services (in respect of which the remuneration was derived) were rendered during that period."

READ: Working in Saudi, do I also pay tax in SA?

Could you please clarify the law on being a seaman working outside the OCS in exploration and mining in the oil and gas industry. I am critical to vessel operations.

As far as my knowledge goes, I still have to work the 183, but I am exempted from the 60 days clause. Can this be confirmed?

Piet Nel, SA Institute of Tax Professionals responds:

The exemption in this instance is in terms of section 10(1)(o)(i).  We accept that it is not a South African ship as defined in section 12Q(1).  

The first requirement is that it is in respect of remuneration derived by any person as an officer or crew member of a ship. The income of a member of a crew will be exempt only if he was on board the ship for a specific purpose only. 

Interpretation note 34 provides no definition of a crew member, but we accept that, as “seaman” you are one.    

In terms of item (bb) the ship must be engaged in the prospecting, exploration or mining (including surveys and other work of a similar nature) for, or production of, any minerals (including natural oils) from the seabed outside the RSA.  

The reference to ‘...where such officer or crew member is employed on board such ship solely for purposes of the “passage” of such ship...’ in section 10(1)(o)(i)(bb) of the Income Tax Act implies that the exemption would only be extended to the employees whose functions solely relate to the passage of the ship.

“Passage” means navigation through territorial waters in a continuous, speedy and efficient manner. The exemption will therefore only apply to officers and crew members, employed on a ship, who are solely involved in the navigation of the ship. It will not include officers or crew members involved in the prospecting or mining activities of the ship.  

You are then correct that the 60 days rule doesn’t apply. The requirement is that the “person was outside the Republic (RSA) for a period or periods exceeding 183 full days in aggregate during the year of assessment”.  

* 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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