In 2017 the National Treasury and SARS announced that they would be introducing major changes in the tax exemption on South African expatriates.<\/p>\n
According to Claudia Aires Apicella, head of Financial Emigration at Tax Consulting SA, the legislative amendment is set to come into effect on 1 March 2020<\/strong>.<\/p>\n It states that South African tax residents abroad will be required to pay tax to South Africa of up to 45% of their foreign employment income, where it exceeds the R1 million threshold.<\/p>\n “With the commencement of the new law fast approaching, SARS has begun prosecuting taxpayers that are non-compliant and, in some cases, has the option to imprison the offender up to a period of two years,” said Apicella.<\/p>\n “This is in terms of the Tax Administration Act and with the help of the now fully active Common Reporting Standard (CRS).<\/p>\n “SARS amendments already implemented in preparation of the foreign income tax law change come March 2020 are as follows”:<\/p>\n SARS concerned about expatriate non-compliance<\/strong><\/p>\n Apicella said that research provided by Treasury and SARS showed that the majority of South African passport holders and permanent residents have simply left the country – without formalising their financial affairs.<\/p>\n “This has prompted not only a law change, but also a stated SARS tax audit focus on those expatriates who have left and simply decided to ignore their taxes,” she said.<\/p>\n “While some did not consider it necessary to submit tax returns in South Africa, others submitted zero tax returns to SARS.<\/p>\n “In some cases, individuals even indicated that they were unemployed on their tax returns while earning expatriate salaries,” she said.<\/p>\n While many expatriates may hope that SARS will drag their feet, the 2017\/18 South African tax return already included targeted questions dealing with expatriate tax status,\u00a0Apicella said.<\/p>\n “The questions may appear innocent enough, but we have seen this trigger an automatic verification or audit process.<\/p>\n “Where the question is marked false, this is a criminal offense, thus creating an even more serious problem,” she said.<\/p>\n\n
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