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How do you determine whether an SA tax resident working in Namibia will be taxed there?

Tuesday, 30 June 2015   (0 Comments)
Posted by: Author: SAIT Technical
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Author: SAIT Technical

Q: I have a client who is employed by a Namibian company, he works in Namibia, his income is paid in pounds sterling to his offshore account and he is taxed on that income in Namibia. He is a SA tax resident due to the fact that he, his partner and two children have lived in SA on a permanent residency basis since 2013.

We will be doing a 2015 tax return for him. Will his Namibian income be taxed in SA? He has not fulfilled the 183 days/60 days section 10(1)(o)  exemption rule. 

I have looked at the DTA agreement between Namibia and SA and it appears as though he will NOT be taxed on this income in SA??

A: You are correct that Article 15.1 of the DTA provides that "Subject to the provisions of Articles 16, 18, 19 and 20, salaries, wages and other similar remuneration derived by a resident of a Contracting State (the RSA) in respect of an employment shall be taxable only in that State (the RSA) unless the employment is exercised in the other Contracting State (Namibia).”  But, if "the employment is so exercised, such remuneration as is derived therefrom may be taxed in that other State (Namibia).” The last sentence is the relevant one. 

This doesn’t give a sole right of taxation to Namibia and the employee will have to rely on the section 10(1)(o)(ii) exemption – the 183 and 60 days one. 

I have accepted that "he is a SA tax resident due to the fact that he, his partner and two children have lived in SA on a permanent residency basis since December 2013 (previously UK residents)”.  You may want to confirm what his resident status is in respect of the treaty.  If he ordinarily resident in the RSA it may not be relevant, but otherwise it may well be.  

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.



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.

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