Expatriate Tax Services

Continuing the series of examining accounting services, we will have a closer look at the tax implications of working abroad.

Many South Africans leave the country annually to accept work in foreign countries. While some of this work may be temporary such as Summer jobs or 1 to 2 year working visas, other careers may see South Africans either working long shift cycles in another country or living there permanently.  South Africa also sees many foreign people entering the country annually on work assignments. The question we will help to answer in this article is “Are you liable to pay SA tax?” Please think of this as a general answer as there are so many different situations all with slightly different tax implications.  If in doubt, contact us and we can schedule a meeting to work out the exact implications for your specific situation.

As a South African working abroad, you should first consider whether you are still regarded as a tax resident in South Africa. This is determined by two tests, the “Ordinarily resident” and “Physical Presence” test.

The “Ordinarily Resident” test presumes that you are a tax resident of South Africa if your real home or residence is located within the borders of South Africa.  This means that you have a physical home that you return to from abroad. Unless you are a permanent resident of another country, this test takes precedence over the “Physical Presence” test.

The “Physical Presence” test looks at the amount of days you have spent in South Africa. If it exceeds 91 days in aggregate during the tax year of assessment, 915 days in total during the preceding 5 years of assessment as well as 91 days in aggregate in each of the preceding 5 years, then you are considered a tax resident in South Africa.

The same two tests apply if you are an Expatriate working in South Africa. If your home is in another country then the “Physical presence” test applies and if you have exceeded the amount of time in South Africa as set out above, you are considered a tax resident.

If you have determined that you are indeed a tax resident of South Africa, you are obliged to disclose your international income in your SARS tax return although many exemptions and deductions may be claimed against that income.

On the flipside if you are not classified as a tax resident, you are only required to submit the income you have generated in South Africa on your SARS tax return. If you are a South African, examples of this income would be rental received from properties that you own or interest on banking accounts.