'Expat tax' amendment explained

The 'expat tax' means South African residents working internationally will only be exempt from paying tax on the first R1-million they earn abroad. Courtesy #DStv403

JOHANNESBURG - The 'expat tax' means South African residents working internationally will only be exempt from paying tax on the first R1-million they earn abroad. 

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Jonty Leon, a legal manager for Tax Consulting SA, explained the change is to an existing section of the Income Tax Act that will tax residents working abroad for income exceeding R1-million.

According to SARS, the exemption under section 10(1)(o)(ii) of the Income Tax Act applies to a South African tax resident who is an employee and renders services outside South Africa on behalf of an employer (South African or foreign) for longer than 183 full days in any 12-month period as well as a continuous period exceeding 60 full days outside South Africa in the same period of 12-months.

The exemption does not apply to non-residents.

Leon advised speaking to a financial professional to reduce liability and establish how much needs to be paid.

Source
eNCA