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News & Press: Opinion

It can be taxing to work abroad

20 July 2015   (0 Comments)
Posted by: Author: Amanda Visser
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Author: Amanda Visser (Moneyweb)

With unexpected traps for the unwary.

Most South Africans think the prospect of working and living in a foreign country is an exciting adventure.

However, the ins and outs of your tax affairs can be enough to make one less adventurous. The first thing to establish is what your "tax residency status” is.

This is easier said than done, because each country has its own set of rules to determine tax residency.

Hugo van Zyl, cross-border tax and exchange control adviser at Breytenbachs Cross-Border Advisory, says one of the most common errors people make is to assume that they will be taxed by the country of contract or from where payment is made.

One can actually end up paying tax in South Africa and the country that you have chosen to work and live in. Most countries of the world will insist or at least attempt to tax the salary or remuneration earned while in the country.

This is the so-called source rule of taxation allowing a tax jurisdiction to tax you where the services are rendered, ignoring the place of contract (employment) and the country from where the salary is paid. This may expose one to double taxation, paying tax where you provide your service and in South Africa, where you are tax resident.

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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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