Over the past couple of years, remote working has become increasingly prevalent as many employees have shifted from working in their employer’s office to working from home, at least part of the time.
The employer company may be regarded as a tax resident in that country, usually due to its place of effective management shifting to that jurisdiction . The relevant foreign country position must also be considered. This often depends on the location and duration for which services are rendered by the employee, as well as the provisions of any double tax treaty concluded between South Africa and the foreign country, if applicable.
This may result in a temporary cash-flow issue for the employee and it is therefore preferable to apply for a hardship directive, where possible.In respect of South Africans relocating abroad, it will be necessary to determine whether they will cease to be South African tax residents as a result of their relocation and, if so, when this will occur.
The employee must also make certain disclosures in their annual income tax return and file such returns timeously.Employees working from home who are taxable in South Africa may qualify for a tax deduction in respect of certain expenses they incur in relation to their home office, as long as they meet certain requirements.
The onus rests on taxpayers to prove that they are entitled to any tax deductions that they may claim. Adequate supporting documentation is required to prove that the relevant requirements in this regard have been met. SARS has indicated that many home office deduction claims have been disallowed because of inadequate supporting documentation.
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