Bookmark : https://www.exceed.co.za/news/is-foreign-income-taxable/?id=12&entryId=191
Skip to : [Content] [Navigation]
  • Big enough to count, small enough to care

    Big enough to count, small enough to care
  • Integrity forms the backbone of our business

    Integrity forms the backbone of our business

News

Back to News

Is foreign income taxable?

01 Oct 2013

Alro de Swardt

If you’re one of the many South Africans who receive income from a foreign country, you may have asked yourself whether it’s taxable in South Africa and whether you should declare it in your South African tax return.

To answer this question, it is important to remember that the South African income tax system is based on the following: If you’re considered to be a South African resident (for tax purposes), you will be taxed in South Africa on all the income you receive, whether the source is local or foreign. Should you have a South African passport and regard South Africa as your regular place of residence, the likelihood is that you will fall into this category and be taxed on your worldwide income.

Many South Africans who work abroad, regard South Africa as their regular place of residence. They usually work overseas for a set period of time before returning to South Africa. If you fall in this category, section 10(1)(o)(ii) may apply to you: Should you be outside the borders of South Africa for more than 183 days, 60 of which were continuous, the income you receive from that foreign income source will be considered exempt for tax purposes in South Africa.

You are still required to declare this income on your tax return, though. Interestingly enough, the above section does not stipulate that the 12 month travel cycle should correspond to the South African tax cycle. You may therefore use any 12 month travel cycle as long as at least one day falls within the South African tax cycle.

If your travel cycle does not fulfil the requirements as set out above, your foreign income will be included in your taxable South African income and taxed at South African tax rates. However, you will be able to use the foreign tax already paid on this income as a tax credit on your tax calculation.

Should you receive income from various income sources (including foreign sources), we recommend that you contact a qualified tax consultant who can advise you on a number of possible tax scenarios.

 

For more information please contact Alro de Swardt of Tenk Loubser & Associates on 021 852 0382 / alro@exceedsw.co.za

    View Archives


    Johannesburg

    Tel: +27 (0) 87 985 0935
    infojhb@exceed.co.za

    London, UK

    Tel: +44 (0) 1784 439 955
    www.exceeduk.co.uk

    Somerset West

    Tel: +27 (0) 21 852 0382/4
    swest@exceedsw.co.za

    Cape Town

    Tel: +27 (0) 21 915 6666
    tygervalley@exceed.co.za

    Paarl

    Tel: +27 (0) 21 872 7118
    paarl@exceed.co.za