It is estimated that the proposed changes to the Income Tax Act will affect more than one million South African expats working abroad. But the benefit of the collection efforts, industry players say, will probably not be worth the trouble.
Currently, SA law exempts all foreign income earned by a SA tax resident if they are stationed abroad for more than 183 days . The change to the foreign employment income tax exemption was proposed in the Budget Review of 2019 for the upcoming legislative cycle and will therefore only be actioned on 1 March 2020.
Edwards urges expats to renegotiate their employment contracts to soften the blow. For example, they could ask their employers to introduce a contractual obligation to pay a smaller salary but increase the pension contribution on behalf of the employee.This should not be confused with an employer simply making contributions to a pension from payroll and must be a contractual condition for services rendered,” he warns.
Residents working in the UK or France shouldn’t be on the hook for much as they share similar tax scales to South Africa and the two countries have treaties in place. Those subject to regimes with lower tax rates, such as the United Arab Emirates, may face a higher tax bill, says Edwards. Treasury and SARS have confirmed they are working towards solving these practical challenges before the law becomes effective.
South Africa South Africa Latest News, South Africa South Africa Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Source: dailymaverick - 🏆 3. / 84 Read more »
Source: dailymaverick - 🏆 3. / 84 Read more »