If you have a good job overseas‚ living in a country where the tax rate is 25%‚ but your salary falls into SA’s 45% tax bracket‚ the taxman now wants to come after you to collect the difference of 20%. Jerry Botha‚ a managing partner at Tax Consulting SA‚ said the draft tax law amendments for 2017‚ which have been published by National Treasury‚ propose a far harsher tax treatment on people earning their livelihood abroad, with the draft law recommending the exemption section 10(1)(o)(ii) be completely repealed. "This means foreign employment income will become fully taxable‚ and the only relief may be claimed is foreign taxes paid as a tax credit. For example‚ where the employee falls into the 45% tax bracket and pays 25% tax in the foreign country‚ the South African Revenue Service (SARS) will now collect the difference of 20%‚" he explained.The current tax law determines that South African tax residents abroad must disclose their worldwide income to the SARS‚ and may then claim a...
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