The lack of clear definitions to determine an individual’s tax resident status has led to different interpretations — resulting in myths and misconceptions, and unintended consequences. South African residents will be paying income tax on any amount exceeding R1m a year earned abroad. To become a tax nonresident is, however, not that easy. The Treasury has announced amendments to the Income Tax Act relating to the exemption of income earned by South Africans while working abroad. The change will become effective in March 2020. Shohana Mohan, head of global employment, expatriate tax advisory at Tax Auditor Solutions, says the South African Revenue Service relies on two tests — the ordinarily resident test and physical presence resident test — to determine an individual’s tax status. The test for ordinarily resident is fairly subjective and based on the intention of the individual, while the test for a physical presence resident is an objective, fact-based test. Elana Nel, a senior a...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.