Taxman coming after expats in UAE‚ elsewhere – despite 8000 Facebook objections

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South Africans working abroad have expressed strong objections to a proposal by Treasury that they be taxed on their foreign earnings in South Africa if they are not tax resident in another country.

South African Revenue Service (Sars) group executive for legal policy and research Franz Tomasek told MPs on Tuesday that about 8‚000 people had protested on the Sars Facebook page against the measure‚ which will see the repeal of the foreign employment income tax exemption for those who work outside the country for less than 183 days.

Tomasek said the number of protesters was an indication that there were far more people who had left the country than the 5‚109 individuals who declared non-taxable foreign remuneration in 2014/15.

“Clearly many South African tax residents who earn money abroad are not declaring that income to SARS‚” Treasury director personal income taxes and saving Chris Axelson said in a briefing to Parliament’s standing committee on finance on the draft Taxation Laws Amendment Bill and the draft Tax Administration Laws Amendment Bill.

He noted however that since the income has so far not been taxable the people working abroad might not have seen the need to make declarations to SARS even though this was required.

Axelson said the exemption had created situations where South Africans paid no tax in countries which did not have income tax such as the United Arab Emirates and also no tax in SA.

He explained that repealing the exemption would mean that all South African tax residents will be subject to tax on foreign employment income earned in respect of services rendered outside SA with relief from foreign taxes paid on the income (under the section on foreign tax credits in the Income Tax Act).

South Africans working abroad will have to provide documentary proof of the foreign taxes they have paid and will pay tax in South Africa on the difference between this foreign tax and the tax they would have paid in South Africa.

Axelson said the introduction of the international automatic exchange of information with foreign revenue authorities will assist in the enforcement of the proposed measure.

Individuals who are not tax resident in South Africa‚ having left the country permanently‚ will not be affected‚ though they will be subject to capital gains tax on their assets.

By: Linda Ensor
politics | state budget and tax

– BusinessLIVE

Source: TMG Digital.


1 COMMENT

  1. Actually figures are a bit wrong. Its now 12905 facebook members, a petition signed by 9861 petitioners and submittals to teeasury fast approaching 1000. Not just objectors but a group taking actions to oppose the repeal of article 10 with representatives in SA.

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