National Treasury has changed the provision in the tax law that exempts South African tax residents from paying tax on income from foreign employment. Currently, anyone who renders services outside of South Africa for more than 183 days in a 12-month period, including a continuous period of more than 60 days, will not be taxed in this country.

Under the new provision, however, the South African Revenue Service (SARS) will only treat the first R1,25 million of these foreign earnings as exempt. Any income above that will be taxed in South Africa. This amendment comes into effect from the start of the current tax year, March 1, 2020.

There are however still some loopholes available, especially for SA expats working in Dubai, Oman, etc. This is available thanks to the double tax treaty that South Africa has with these countries.  The SA expat has, however, to be in the employ of a company that is registered in that country.

The SA expat still needs to be more than 183 days in a 12 month period to be outside South Africa and part of the 183 days must be one continuous period of 60 days.

South Africans that are working in countries like Germany, The UK, USA, Canada, etc will be able to deduct any foreign tax from there SA tax liability and it is highly unlikely that they will pay tax in South Africa on those foreign earnings.

South Africans that work abroad and that earn SA rental income need to declare their SA rental income on their SA tax returns.

You are welcome to contact the Tax Consultant Fanus Jonck (tax@jonck.net) with your tax queries.