What does the proposed 2020 tax law mean for SA expats?

From 1 March 2020, South African tax residents abroad will be required to pay tax to the South African Revenue Service (SARS) of up to 45% of their income earned outside South Africa (including fringe benefits) if it exceeds a R1.25 million threshold. For the first R1.25 million to be exempt, a SA expat must be:

  • a South African tax resident
  • employed and earn an employment income through an employment contract (and not, for example, be self-employed)
  • 183 days outside of South Africa during a 12-month period, from which 60 days are continues.

You have to adhere to all the above criteria, otherwise you will be taxed on your worldwide income, unless you are a non-tax resident of South Africa.

With the proposed 2020 tax law, SARS wants to focus especially on those expats who have left South Africa and simply decided to ignore their taxes. While some did not submit any tax returns in South Africa, others submitted zero-tax returns to SARS. Some expats even indicated that they were unemployed on their tax returns while earning expatriate salaries. SARS has the option to imprison offenders up to a period of two years.

Contact us for a FREE consultation

We’ll answer all your questions. Your personal consultation is completely free and without obligation.

Licensed South African Financial Services Provider FSP # 42872

Follow us on Social Media

Related Financial Emigration Questions

What is the physical presence test from SARS?
What does the proposed 2020 tax law mean for SA expats?
Will financial emigration terminate your tax residency status?
What is the difference between financial emigration and emigration for tax?
How will the 2020 tax law effect South African expat’s foreign employment income tax exemption?
What is South Africa’s tax laws for expats
What is the ordinarily resident test from SARS?
Do I pay tax on my money earned abroad?
What are the implications of the new 2020 tax law on expat tax South Africa?
What kind of tax system does South Africa use?
What is exit tax?
Can South African expats change their tax residency in South Africa to non-resident?