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South African income tax on animals exported to the United Arab Emirates

28 November 2014   (0 Comments)
Posted by: Author: SAIT Technical
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Author: SAIT Technical

Q: I have a client that receive income from the United Arab Emirates (UAE) and Dubai. There are people that contracted him to buy animals in SA and export them to the UAE. He receives income on each transaction. They pay money into his bank account and send a list through of what they want. He purchases the animals, takes a portion of the purchase price as income (fee for services rendered) for himself and then exports the animals.

He also travels to the UAE for training etc. He however wasn't there for more than 180 days. Will he be taxed in SA on that income he received for the transactions?

A: The treaty with the United Arab Emirates is in the process of negotiation or finalised but has not yet been signed.  The normal rules will therefore apply.  From the facts we accept that the person is ordinarily resident in the RSA.  As such all his receipts or accruals irrespective of the source thereof will be gross income in the RSA and as such potentially taxable in the RSA. As he carries on a trade he will be able to make the deductions permitted by the Income Tax Act.

Disclaimer: Nothing in this query and answer should be construed as constituting tax advice or a tax opinion. An expert should be consulted for advice based on the facts and circumstances of each transaction/case. Even though great care has been taken to ensure the accuracy of the answer, SAIT do not accept any responsibility for consequences of decisions taken based on this query and answer. It remains your own responsibility to consult the relevant primary resources when taking a decision.


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