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SARS takes aim at tax exemption for foreign employment

15 May 2013   (0 Comments)
Posted by: Author: Dan Foster
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Source: Dan Foster (Moneywebtax)

One of the biggest surprises in Annexure C of this year's Budget papers, apart perhaps from the reform to taxation of trusts, were two vague sentences on page 190 stating that the foreign employment exemption, universally referred to as ‘section 10(1)(o)(ii)', was under review, particularly instances where "a South African employer is involved".

That Sars should seek to close or limit the exemption does not in itself come as a surprise. In recent times, there has been much gnashing of teeth on both sides of the table over this exemption. Sars believes that the tax profession does not understand section 10(1)(o)(ii), and the tax profession feels much the same way about Sars assessors and auditors. South Africans working abroad who have dared to claim the exemption have been met with audits and scrutiny, disallowed objections, requests for all manner of evidence, and ultimately summoned back to South Africa to prove their bank details if, and when, Sars chooses to pay their refund.

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