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.
Section 240A of the Tax Administration Act, 2011 (as amended) requires that all tax practitioners register with a recognized controlling body before 1 July 2013. It is a criminal offense to not register with both a recognized controlling body and SARS.