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Does a non-resident earning a SA-sourced subsistence allowance have to register for income tax?

22 April 2015   (0 Comments)
Posted by: Author: SAIT Technical
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Author: SAIT Technical

Q: A seconded employee from India will be in SA under a S11(2) VISA. He will be in the country for a period of 3 months and will receive a subsistence allowance of R 50 000 per month. Will this be taxable in SA? Does he have to register for tax and submit a tax return?

He has resigned from employment in India and will not be receiving remuneration from India.

A: A non-resident taxpayer will only be taxed on his SA sourced income in terms of SA local law (s1 ITA definition of gross income). Where the same amount will also be taxable in India you would have to determine whether the SA/India DTA provides taxing rights to SA, and if so, what relief is available in terms of the DTA in India.

The obligation to register for tax is dependent on whether the person is liable for normal tax in SA or is required to submit a return per the relevant SARS notice. The relevant notice includes a natural person whose gross income exceeds the tax threshold and who is not excluded by para 3 in that notice.

http://www.sars.gov.za/AllDocs/LegalDoclib/SecLegis/LAPD-LSec-IT-GN-2014-09%20-%20Notice%20506%20GG%2037767%2025%20June%202014.pdf

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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