Tax returns for 2017 tax year that ended 28 February 2017, could be submitted from 1 July 2017. Taxpayers have time until November 2017 to submit it.

South Africans that live and work abroad and who are only maybe once a year visit South Africa for a holiday only need to file income tax returns if they receive South African rental income or income from a South African business.  Taxpayers that leave South Africa permanently or only for a few years must remember to file the tax return in the tax year in which they are leaving as they usually then also get a tax refund!  This is because too much tax is usually deducted as the person did not work the full tax year.

South Africans that live abroad and that does not qualify anymore as a South African tax resident, must take note that they are not anymore taxable on capital gains on selling shares on the JSE.

South Africans that work abroad for short periods, for example, a month or six and who is returning continuously to SA will need to file South African income tax returns

The South African Revenue Services do ask South African taxpayers that work abroad to show proof that they complied with the 183 days and one 60 day continuous day requirements.

SARS standard request reads:

“Kindly furnish our office with the letter from your employer stating the number of days with dates in and out of the country as well as the portion of income considered to be exempt. “

They will also ask for copies of your passport. They will only accept it if taxpayers number their passport copies and clearly shows which stamps were departures from SA and arrivals in SA.

The 60-day continuous period is not a requirement for people working on oil rigs and on shipping vessels if they are part of the ship’s crew.

Many people assume incorrectly that their foreign income can only be exempt if the 183 days and 60-day requirements were met in a tax year. That is not correct, as it could be in any 12 month period.   If a person meets the 183 and 60 days requirements from 1 July 2016 to June 2017, then it means that in the 2017 tax year foreign income earned from July 2016 till February 2017 is exempt, as also foreign income earned from March 2017 till June 2017 in the 2018 tax year.

If the 60 day period is from 1 July 2016 till 31 August 2016, then the taxpayer is allowed to use this 60 continuous days as both starting and ending a 12 month period.  Their 12 month periods could, therefore, be September 2015 until August 2016 and another 12 month period could be July 2016 till June 2017.

Please remember that you only submit an income tax return after you met the 183 days and 60-day requirements. If you are working abroad since 1 January 2017 then you should not file your 2017 income tax return that is ending February 2017 in July 2017, if you have then not yet made the 60 and 183-day requirements, as SARS will then tax your foreign income earned in January and February 2017. You will, however, be able to deduct any foreign tax that was paid from your South African tax liability if that country has a double tax agreement with South Africa.

Even if you are living and working outside South Africa and is earning no SA sourced income, my advice is to file an SA return if you do still contribute to an SA Retirement Fund, as SARS will then one day on paying out the Retirement annuity take your contributions into account as a deduction for tax purposes!

For any Tax advice, you are welcome to contact Fanus Jonck (tax@jonck.net)