Income Tax -Section 10(1)(o)(ii)-Exemption from income tax: Foreign employment income

[Lord Farquart]

Thought I would start a separate thread on this. Seems there are quite a few people that have questions regarding this from time to time. Hope someone can give me a quick answer on this.

In 2014-2015 I worked outside SA. Did my 183/60 days, so no problem there. Actually did 219/61 from 00:00-:00 as stipulated. In the "Income Tax Interpretation Note #16 dated 27/3/2003 (Not sure if there is a newer one?) it states the following:

Where a person who has already complied with the exemption
requirements of section 10(1)(o)(ii) in a year of assessment,
spends vacation leave or sick leave in South Africa during the
same year of assessment, the remuneration received by the
person during the period of leave will continue to be exempt from
tax in terms of section 10(1)(o)(ii) to the extent that the
remuneration is attributable to the number of vacation or sick leave
days credited to the employee in respect of and during the period
of service outside South Africa under a vacation or sick leave
scheme operated by the employer that is similar to vacation or sick
leave schemes that generally prevails in the South African
business community for persons employed in South Africa.

Does this mean that I add the 3 weeks leave i took in December to the 219 days out of the country, ie 219+21=240?

Also, am I correct in saying the money I will get back from SARS will not be my tax for 365 days, but only for the time outside the country plus leave (If the answer to the previous question is YES), so 240/365*tax payed?

 

[Dalaw89]

The as soon as the exemption applies and you are a non resident which means you can only be taxes on sources from SA not outside SA for that year of assessement. In lay mens terms all foreign income earned for the applicable yoa is exempt if from a foreign source. Just remember to incl it in gross income and the exempt it for your tax return.

 

[Lord Farquart]

The as soon as the exemption applies and you are a non resident which means you can only be taxes on sources from SA not outside SA for that year of assessement. In lay mens terms all foreign income earned for the applicable yoa is exempt if from a foreign source. Just remember to incl it in gross income and the exempt it for your tax return.

Your answer is applicable to which of the two questions I asked?

 

[curbs2012]

See the days requirement as a minimum.
183 days and 60.
Once you are in, you are in for the 12 months or year of assessment in question.

So yes, you can add those days you have spent on vacation to your days outside, but only once you have reached the minimum days prior to taking the vacation or leave.

See this paragraph:
Weekends, public holidays, vacation and sick leave spent outside
the Republic are considered to be part of the days during which
services were rendered during the 183 day and 60 day periods of
absence.

Take the above from the point of view that you have not made the minimum days yet, and you would add the leave days, as long as you are out of SA.

Once you have made the minimum days, your paragraph you quoted comes into play, even though you are in SA, as long as the leave relates to the foreign employer.

Question 2:
Essentially no, SARS / revenue authority does not want to tax you twice on the same amount. So, you pay tax no income earned from foreign employer, declare it to SARS (SA resident), exempt it on your return, with reasons, and submit. The amount is therefore not subject to tax in SA and there is nothing for SARS to refund to you. Unless you know or can show that you have been taxed in SA on the same amount.

 

[Lord Farquart]

Thanks for the detailed answers curbs2012. I have paid full tax for the year, so SARS will need to refund me the tax for the time spent outside. I did not know back then if I would make the 183/60. Now that I did, I need to claim it back.

 

[curbs2012]

Thanks for the detailed answers curbs2012. I have paid full tax for the year, so SARS will need to refund me the tax for the time spent outside. I did not know back then if I would make the 183/60. Now that I did, I need to claim it back.

No worries.
Yup, in that case, you will get the tax credit paid back to you for the amounts earned outside of SA.

 

[PugRC]

On this topic.

I work on contract in Liberia. Normally 6 on 6 off with a tour to cover the 60 days.

Does anyone know whether the law is changing? Cause I've heard that they might be getting rid of the 183/60 rule. But I can't find anything. Not even in the Government Gazette.

Any help is greatly appreciated.

 

[AchmatK]

On this topic.

I work on contract in Liberia. Normally 6 on 6 off with a tour to cover the 60 days.

Does anyone know whether the law is changing? Cause I've heard that they might be getting rid of the 183/60 rule. But I can't find anything. Not even in the Government Gazette.

Any help is greatly appreciated.

Any changes to the Income Tax Act would most likely only come out in the budget speech later this month and gazetted soon after.

 

[Hamish McPanji]

I spend about 3-4 months of the year In Africa. But in 1 week and 2 weeks stints. Can I claim back taxes for that period if it's not reflected in my payslip?