South Africans living or working abroad can no longer avoid the long arm of SARS. Under pressure to meet its revenue quotas, the tax authority has started auditing the country’s non-compliant expatriates in earnest.
1 March 2021 marks a watershed for retirement funds in South Africa, says Jean du Toit, attorney and head of tax technical at Tax Consulting South Africa.
As a South Africa working and living abroad, there is nothing more frustrating than incessant delays on applications for new and/or renewals of South African Government-issued documentation (referred to as “Civic services”).
On 13 October 2020, National Treasury and SARS published their responses on the Draft Taxation Laws Amendment Bill (“TLAB”), which included potential relief for South African expatriates who were unable to leave South Africa owing to the Covid-19 lockdown.
The protracted lockdown in South Africa resulted in the Department of Home Affairs (“DHA”) offering limited emergency services. South African citizens and permanent residents seeking Civic Services such as unabridged birth and marriage certificates were left frustrated as existing applications were indefinitely delayed.
National Treasury has responded to some of the key changes proposed in its Draft Tax Law Amendment Bill (TLAB) and Draft Tax Administration Laws Amendment Bill (Draft TALAB) – including questions around emigration and harsher punishments for taxpayers.
South African expatriates who were unable to leave South Africa on account of the lockdown will be relieved to learn that the requirements of the foreign employment exemption (Section10(1)(o)(ii)) will be relaxed.
The time for South Africans who consider emigrating to learn their fate around their pensions is drawing closer.
Employment remuneration earned by South Africans working abroad, prior to March 2020, were fully exempted from South African taxation provided the tax payer spent more than 183 calendar days, of which 60 days are consecutive, outside of the republic over any 12 month period.
“Expats who follow shady advice to deregister as taxpayers with SARS will suffer in the long run,” says Jonty Leon, Legal Manager (Expatriate Tax) at Tax Consulting SA.