Contract work & Tax

[guest2013-1]

Hey guys

I'm suppose to invoice my stuff out to a client in the next couple of days. They're not deducting tax which means I have to pay in a certain amount right? Is this monthly or like yearly or something?

I possibly have a visa copy lying around of my time in Dubai. I was out of the country for 9 months meaning I don't pay tax on the money I earned there, but being back now means I do. I was thinking of keeping a copy of my visa (before they cancelled in) as proof that I still work overseas?

Or can they tell from my passport being scanned in/out at the airports? Just wondering if I can beat the system I won't mind a tax-free salary for a bit over the next 3 months anyway.

 

[spiderz]

If the money came back into SA you'll probably have to pay tax on it...
They are scaly bastards..

 

[stoke]

SA law is pretty clear, you pay tax on the money you earn.
The law does not care where it comes from.
(EDIT: This is not true, CathJ has pointed out that SA has agreements with certain countries where tax may be paid in the other country.)

i.e. If it ends up in an account in your name on South African "soil", it counts as your earnings.

You can Pay As You Earn (PAYE), or you can register as a provisional tax payer and pay every 6 months.
I'm not sure what the rules are with PAYE, or if people of a certain "category" have to be on the PAYE system.

 

[CathJ]

SA law is pretty clear, you pay tax on the money you earn.
The law does not care where it comes from.

i.e. If it ends up in an account in your name on South African "soil", it counts as your earnings.

You can Pay As You Earn (PAYE), or you can register as a provisional tax payer and pay every 6 months.
I'm not sure what the rules are with PAYE, or if people of a certain "category" have to be on the PAYE system.

That depends. It does matter where you earned it; if you paid tax in the country you earned it in, and they have a reciprocal agreement with SA, then you don't have to pay tax on it here. So if you worked in the UK for a year, and bring your money back here with you, you don't have to declare the income you earned in the UK because you've already paid tax on it (albeit not to SARS).

 

[remybfg10k]

Why is the company not deducting tax though?

 

[stoke]

Thanks CathJ. I've updated my post, and my knowledge.
Now ... I wonder where SARS hides that list of "reciprocal" countries.

@remy ... why would the company deduct tax? Company receives invoice, company pays invoice. They're not paying an employee.

 

[remybfg10k]

stoke, totally misread the thread, apologies

 

[koeks]

the companies will state that they paid you, either way you will be caught out. Mr tax man does not play... that's the most efficient government service department

 

[quovadis]

If youre a contractor to them (natural person) they should be deducting 25% off and you settle the rest when you do your tax return. If you're a company (CC, PTY, Sole Proprietorship) they just pay your invoice and you do your tax on your own.

 

[Barefoot Billionaire]

I'm in a similar position and only pay SARS my tax due every six months.

Not sure about the 3 months in SA and how SARS would view your tax status. How long have you been gone? Are you still an SA tax-resident? There's an article on RealEstateWeb today covering foreigners earning income in SA: http://www.realestateweb.co.za/realestateweb/view/realestateweb/en/page206?oid=31370&sn=Detail

There have been quite a few articles covering SA tax and working overseas over the past few months on MoneyWeb Tax too. May be worth checking them out.