SA Retirement annuity while overseas

whatwhat

whatwhat

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Hello,

Question for any tax expert.

At the moment when working overseas the first 1.25 million Zar is tax free, so you subtract that from your gross. Wherever is left (if positive) you pay whatever tax bracket that amount falls in, and you can use you tax paid under double tax as credit.

With an RA you can get up to 27.5% deduction from taxable amount. I am curious if that applies in this case too?

So if you have an South African RA can you subtract that as normal? Or does that only apply to SA earned money?
 
whatwhat said:
Hello,

Question for any tax expert.

At the moment when working overseas the first 1.25 million Zar is tax free, so you subtract that from your gross. Wherever is left (if positive) you pay whatever tax bracket that amount falls in, and you can use you tax paid under double tax as credit.

With an RA you can get up to 27.5% deduction from taxable amount. I am curious if that applies in this case too?

So if you have an South African RA can you subtract that as normal? Or does that only apply to SA earned money?
Click to expand...
As a non-tax-expert, who has done some investigation as an expat: I would think that if they’re classifying you as a tax resident, then it’s all just “Money earned as a tax resident”, and it should apply (ie, apart from the exemption you are treated as though you are in SA making that money from a foreign source, which means that it is treated like any other income).
 
Bearing in mind it’s a rebate on tax paid.

So it would surely only apply to the portion of tax paid after the 1.25 tax free bracket and not a whole?

It’s giving you back on tax you’ve already paid, so if you didn’t pay anything I would imagine you can’t claim anything?

Utterly amateur non-expert question mark opinion.
 
So i asked some tax experts and they said that the RA rebate only goes against SA sourced income. So i cannot use RA deduction against any foreign income.

That makes sense, and just means more that money goes into index funds now as RA returns are poor.
 
whatwhat said:
So i asked some tax experts and they said that the RA rebate only goes against SA sourced income. So i cannot use RA deduction against any foreign income.

That makes sense, and just means more that money goes into index funds now as RA returns are poor.
Click to expand...

My RA returned 24.2% after costs last year.

My Index Funds were nowhere close.
 
Arthur said:
Which fund is that?
Click to expand...

10X

I mean obviously the recovery played into it so it’s an extreme year, just counter acting the blanket statement that RA’s give low returns.

In general the good ones do 12-18% over the longer term.
 
whatwhat said:
So i asked some tax experts and they said that the RA rebate only goes against SA sourced income. So i cannot use RA deduction against any foreign income.

That makes sense, and just means more that money goes into index funds now as RA returns are poor.
Click to expand...

What about index fund RAs? :unsure:
 
Are you temporarily working overseas or are you a permanent worker of an overseas company? i thought one can apply for tax exemption altogether if working on visa overseas and living here anymore. Or am I being ignorant of the laws?
 
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