{"id":369620,"date":"2020-01-30T17:30:40","date_gmt":"2020-01-30T15:30:40","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=369620"},"modified":"2020-01-30T16:51:18","modified_gmt":"2020-01-30T14:51:18","slug":"thousands-of-south-africans-to-feel-bite-of-new-expat-tax","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/finance\/369620\/thousands-of-south-africans-to-feel-bite-of-new-expat-tax\/","title":{"rendered":"Thousands of South Africans to feel bite of new expat tax"},"content":{"rendered":"

Several thousand South Africans are set to be impacted by new amendments to the Income Tax Act which will come into effect from 1 March 2020.<\/p>\n

Currently, South African tax residents who render services outside the country on behalf of an employer for longer than 183 full days in any 12-month period can be granted an exemption on their income tax.<\/p>\n

However, under the new rules set to be introduced in March, these South African will only receive a break on the first R1 million earned abroad. After this, you can be taxed according to South Africa\u2019s own income tax system.<\/p>\n

Speaking in an interview with CNBC Africa<\/a> <\/strong>Tim Mertens, chairman of Sovereign Trust, said that while R1 million might seem like a high threshold, it is not much when considering the dollar ($67,936) or pound (\u00a351,857) conversions.<\/p>\n

He said that this amount will also include taxable fringe benefits such as housing, pension and travel allowances.<\/p>\n

“(Taking these into account) it would seem that many people living overseas will be in excess of the amount and then be subject to South African tax.”<\/p>\n

Mertens said that up to 100,000 South Africans live in Dubai alone and approximately 3,000 South African residents live in Hong Kong.<\/p>\n

“There are South Africans working in all parts of the world such as Europe, Asia and elsewhere, so it is potentially quite a coup for SARS if they can tap into that tax base.<\/p>\n

“It does mean that residents working really have to consider their tax affairs very carefully now.”<\/p>\n

Understandably, some expats are aggrieved by this change.<\/p>\n

Concerns have been raised that limiting this exemption may increase permanent emigrations from South Africa and have a negative impact on remittances to country, particularly for those with lower incomes working abroad.<\/p>\n

National Treasury is, however, firm in its view that the R1 million threshold is already a compromise, and that from a policy perspective the abuse of the exemption by some expats unfairly benefitting from \u201cdouble non-taxation\u201d (i.e. not paying tax in either South Africa or the foreign country in which they work) must be stopped.<\/p>\n

\n

Read: Alcohol, cigarette, and payroll taxes \u2013 here\u2019s what could fund the NHI<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Several thousand South Africans are set to be impacted by new amendments to the Income Tax Act which will come into effect from 1 March 2020.<\/p>\n","protected":false},"author":10,"featured_media":102841,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11121],"tags":[26],"class_list":["post-369620","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance","tag-headline"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/369620","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=369620"}],"version-history":[{"count":9,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/369620\/revisions"}],"predecessor-version":[{"id":369674,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/369620\/revisions\/369674"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/102841"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=369620"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=369620"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=369620"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}