How ending tax exemption on foreign income could affect your employees
A proposed scrapping of the tax law might lead to more younger people in middle management cutting ties with SA in favour of greater income savings in the future
SA’s four large audit firms and tax and accounting industry institutes have made a joint submission to the Treasury, asking for a proper investigation into the effect of scrapping an existing income-tax exemption on foreign income. PwC, EY, KPMG and Deloitte, the South African Institute of Tax Professionals (Sait) and the Institute of Chartered Accountants (Saica), conclude that the intended scrapping of the tax exemption will increase the cost of employment, and will affect existing projects as well as the future competitiveness of South African labour. Currently, South Africans working abroad for more than 183 days a year enjoy a tax exemption on the foreign employment income they earn, subject to certain conditions. The Treasury announced in the February budget that the exemption "appears excessively generous" as the foreign income may benefit from double nontaxation. It has proposed that the exemption be adjusted so that foreign income is exempt from tax only if it is subject to...
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