Legislation has been passed that will remove the current tax exemption available to South Africans employed abroad. Despite intensive lobbying, there can be no doubt that the tax authorities intend to push ahead with this tax. The tax comes into effect from 1 March 2020.
“A fine is a tax for doing wrong. A tax is a fine for doing well.” (Ecard humour)
(Note: If you aren’t yourself an expatriate, please think of passing this on to someone who is – forward planning is important here!)
How it works, and the “183/60 tax exemption”
Prior to the latest amendment, tax residents living and working abroad for more than 183 days in any 12 month period (at least 60 days being continuous) were not taxed in South Africa on their foreign earnings.
From 1 March next year, foreign income of over R1 million per annum will be taxed in South Africa.
As this income includes fringe benefits and the Rand is weak compared to first world currencies, many employees will fall into this threshold.
Read more news in our latest CA(SA)DotNews Newsletter.