Working overseas? You could soon face a less generous tax exemption
Treasury is tightening up a system that has led, in some cases, to South Africans not paying any tax at all
The government intends to adjust the way foreign employment income is taxed to prevent cases of "double nontaxation". South Africans working abroad for a short period enjoyed an "excessively generous" exemption, Treasury said in the 2017 budget review. Jerome Brink, associate in the tax and exchange control practice of law firm Cliffe Dekker Hofmeyr, says many South Africans who are seconded by their employers to work in offshore jurisdictions use the exemption offered to them in the Income Tax Act. He says that apart from the 183 full days that an individual must spend outside the country during a tax year, the exemption will only apply if, during that 183-day period, there was a continuous period of at least 60 days away from SA. Treasury says if a South African works in a foreign country for more than 183 days with no tax payable in the foreign country, that foreign employment income will benefit from double nontaxation. It is proposed that this exemption be adjusted so that fore...
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