South African Expatriate Tax legislation specifically relating to the income of Expatriate South Africans working and living abroad.
There is a lot of information and mis-information out in the market as to what the issues are and will be in effect from March 2020.
There is NO ‘one-size’ fits all solution.
Issues on this subject are:
1. Tax Residency
2. Residency
3. Nature of contract of employment
4. Tax status in South Africa including compliance
5. Emigration & Financial Emigration
6. South African Citizenship
7. Double Tax agreement applicability
Financial Emigration is NOT a complete solution and may not be necessary in all instances. One would need to look at the circumstances in terms of the following:
1. South Africans looking to migrate abroad
2. South Africans on contract work
3. South Africans already abroad and not complying with tax regulation in South Africa
4. South Africans who have been complying
Each of the circumstances will be looked at separately from both a South Africa Tax and Reserve Bank perspective.
Basic principles:
Tax rules up to 2020 were basically based on the principles of South African Taxpayers earnings from employment in one manner or the other outside of the borders of South Africa for a period in excess of 183 days would not be subject to South African Tax. With effect from March 2020, for affected expatriates (to be qualified in terms of the new legislation) income in excess of ZAR1m (currently US$ 75000) in a tax year will be subject to South African Income Tax based on the current progressive tax tables in force in South Africa up to a maximum of 45% in respect of worldwide income in excess of ZAR1 500 000 (US$112 000).
Tax tables 2019 Tax Year
RATES OF TAX FOR INDIVIDUALS
2019 tax year (1 March 2018 – 28 February 2019) – see changes from last year
?Taxable income (R) ?Rates of tax (R)
0 – 195 850 18% of taxable income
195 851 – 305 850 35 253 + 26% of taxable income above 195 850
305 851 – 423 300 63 853 + 31% of taxable income above 305 850
423 301 – 555 600 100 263 + 36% of taxable income above 423 300
555 601 – 708 310 147 891 + 39% of taxable income above 555 600
708 311 – 1 500 000 207 448 + 41% of taxable income above 708 310
1 500 001 and above 532 041 + 45% of taxable income above 1 500 000
