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
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.