There are different tax rules for South Africans working abroad on land and those out on the sea (oil rigs, etc.). Section 10(1)(o)(ii) applies to people working on land and section 10(1)(o)(i) to people working on boats, oil rig, etc.

People that work at sea are however allowed to use section 10(1)(o)(ii) if they qualify. But not the other way around!

The new legislation that only the first R1,25 million is exempted if you work abroad is not applicable to South Africans that work at sea. They are therefore not limited to the R1,25 million exemption if they were an officer or crew member of a ship. The requirement is just that they have been more than 183 days out of South Africa in a tax year. (1 March to 29 February)

They do not have to do a continuous period of 60 days outside SA. The problem is that a person might start in July working on an oil rig. These workers usually work 28 days and then they go home (SA) for 28 days. In that person’s first tax year working on an oil rig he is not going to qualify for doing 183 days abroad in the tax year (1 March – 29 February). My advice to such workers is that he or she should consider doing 60 continuous days outside SA to be tax exempt on his foreign income. The person could then claim an exemption under section 10(1)(o)(ii)!

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