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Will foreign tax for services rendered abroad constitute final RSA tax?

14 March 2014   (0 Comments)
Posted by: Author: SAIT Technical
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Author: SAIT Technical

The answer to this query is based on legislation as at 2014/03/14.

Q: My South African, married client is 58 years old. He has been working for a large SA company as an engineer for many years. He has three properties in SA which he rents out. He has been offered a job in Malawi on a three year contract.  There is a double taxation agreement between SA & Malawi. The maximum tax rate in Malawi is 30%. If he accepts this job he will need to start on 1 June 2014 and take early retirement from his current job so that he does not lose out on his medical aid plus share allocations. (Therefore resignation is not an option)!

My question is, will SA tax him with any additional taxes on his earnings from Malawi? Or would this 30% tax on his salary in Malawi be the total amount payable? 

A: I trust that your client will, even though not present in the Republic remain "ordinary resident" in the Republic for tax purposes. This will mean that your client will have to submit tax returns in the Republic on an annual basis as usual and declare his world-wide income. From a South African perspective will your client be able to claim a s 6quat rebate/credit limited to the South African tax liability on the foreign income. The taxes paid on the remuneration received from Malawi will therefore not be a final tax from a South African perspective.


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.


The Act requires that a minimum academic and practical requirments be set to register with a controlling body. Click here for the minimum requirements of SAIT.

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