Section 10(1)(o)(ii) exempts any remuneration received by or accrued to a person by way of any salary, leave pay, wage, overtime, bonus, gratuity, commission and fee if it is in respect of services rendered outside the Republic of South Africa for or on behalf of any employer-provided that person was outside the Republic of South Africa –

• For a period or periods exceeding 183 full days in aggregate during any 12 month period commencing or ending during that or any other year of assessment; and
• For a continuous period exceeding 60 full days during such period of 12 months; and
• Such services were rendered during such periods worked outside the Republic.
• The remuneration referred to in this subsection includes fringe benefits and benefits under employee share schemes.

The payment must relate to employment. Independent contractors(self-employed persons) may not claim the exemption.

The payment does not have to be received during the year that the employee was outside the Republic. It must merely relate to the work done outside South Africa.

Note that the provisions do not apply to any person contemplated in section 9(1)(e) (government employees).

If a person is in transit through the Republic and does not formally enter the Republic, he is deemed to be outside the Republic.

The services do not have to be rendered during the whole time that the employee is outside the Republic. If the employee is on holiday outside the Republic, the days on holiday count towards the days’ requirement.

You are welcome to contact the South African Tax Consultant, Fanus Jonck on any tax queries that you might have (tax@jonck.net)