tax exemption from SARS?

[Priapus]

So I am out of SA at the moment in the UK and will only be back in SA next year. I've heard that if you're out of SA for more than 183 days, you can claim all your tax back for last six months. Just need some clarification on this from any tax gurus.

I'm employed by a South African company under permanent employment and am still working for them while I am abroad (All remote work) and am still paying tax as I should. . However when I return back to SA next year would I be able to claim my tax back from SARS for the last six months?

 

[ToxicBunny]

So I am out of SA at the moment in the UK and will only be back in SA next year. I've heard that if you're out of SA for more than 183 days, you can claim all your tax back for last six months. Just need some clarification on this from any tax gurus.

I'm employed by a South African company under permanent employment and am still working for them while I am abroad (All remote work) and am still paying tax as I should. . However when I return back to SA next year would I be able to claim my tax back from SARS for the last six months?

You should be able to yes....

Have a chat with your payroll people and get them to start finding out what you need to do.

 

[Priapus]

You should be able to yes....

Have a chat with your payroll people and get them to start finding out what you need to do.

I did chat with them briefly before leaving. They're paying me as per normal with tax deductions as they should. They just informed me that I should be able to claim all the tax back next year when I come back. I'm just wondering what the exact terms for for claiming the tax back and what exceptions SARS have on this.

Thanks for the reply.

 

[JimmyRott]

I did chat with them briefly before leaving. They're paying me as per normal with tax deductions as they should. They just informed me that I should be able to claim all the tax back next year when I come back. I'm just wondering what the exact terms for for claiming the tax back and what exceptions SARS have on this.

Thanks for the reply.

I'm in the same situation. Except I managed to convince my company to pay my salary without deductions. I have spoken to my auditor and they have informed me that I just need to prove that the remuneration received was for work performed outside of RSA (my contract clearly states this), I have been out of SA for more than 183 days in any calender year (doesn't have to start at any specific point) and that I was outside of SA for one continuous period of more than 60 days.

So in my case my contract overseas started in May. From March 2015 to End of April 2015 I will pay tax as normal. For the period from May 2015 till Feb 2016 my income is tax exempt. Should I return next year may the income for March 2016 and April 2016 will not be taxable in the 2016 financial year. From that point on I will pay normal taxes once again.

 

[Priapus]

I'm in the same situation. Except I managed to convince my company to pay my salary without deductions. I have spoken to my auditor and they have informed me that I just need to prove that the remuneration received was for work performed outside of RSA (my contract clearly states this), I have been out of SA for more than 183 days in any calender year (doesn't have to start at any specific point) and that I was outside of SA for one continuous period of more than 60 days.

So in my case my contract overseas started in May. From March 2015 to End of April 2015 I will pay tax as normal. For the period from May 2015 till Feb 2016 my income is tax exempt. Should I return next year may the income for March 2016 and April 2016 will not be taxable in the 2016 financial year. From that point on I will pay normal taxes once again.

Thanks for that. I am not out of SA for work reasons; however I am still preforming my duties while being abroad. My contract makes no mention of working abroad (AFAIK). Would this be grounds for SARS not to approve my claim of tax back for the last six months?

 

[JimmyRott]

Thanks for that. I am not out of SA for work reasons; however I am still preforming my duties while being abroad. My contract makes no mention of working abroad (AFAIK). Would this be grounds for SARS not to approve my claim of tax back for the last six months?

I would think that it will be an issue. I am by no means an expert on this but if I remember correctly the clause states something along the lines of "... for work performed outside of South Africa." I am not sure whether this is interpreted as work performed for the benefit of a party/project outside of SA or if it just applies to the physical location of the person doing the work. I would recommend you speak to an auditor. I was advised to speak to someone at PWC. They were very helpful in explaining the issues to me and didn't charge a cent. I have subsequently appointed them to do all my tax returns.

 

[lainu]

I'm in the same situation. Except I managed to convince my company to pay my salary without deductions. I have spoken to my auditor and they have informed me that I just need to prove that the remuneration received was for work performed outside of RSA (my contract clearly states this), I have been out of SA for more than 183 days in any calender year (doesn't have to start at any specific point) and that I was outside of SA for one continuous period of more than 60 days.

So in my case my contract overseas started in May. From March 2015 to End of April 2015 I will pay tax as normal. For the period from May 2015 till Feb 2016 my income is tax exempt. Should I return next year may the income for March 2016 and April 2016 will not be taxable in the 2016 financial year. From that point on I will pay normal taxes once again.

Hey, i a in a similar situation at the moment, when I filed my return this year, SARS disallowed my tax exemption. My tax consultant is busy investigating this, but can SARS deny this? I am eligible for the exemption. Is there anything specific that needs to be done or can this claimed back in another way?

 

[Lord Farquart]

1. You have to have a contract/secondment letter that states you are working outside of SA.
2. 183 days total, of which 60 has to be continuous. 00:00AM to 00:00AM is one day, not parts.
3. Tax code to be changed.
3, It can be more than 183 days/6 months. You will get tax back for every day you were outside. I was out for 274 days and got back close to half a bar.
4. Get a tax consultant. R4500 paid to them is well worth it for not dealing with SARS directly. PM me for details of a good company, that actually advise SARS on these specific matters.

Typical Exemption letter

Dear Sir/Madam
RE: EXEMPTION FROM INCOME TAX: FOREIGN EMPLOYMENT INCOME
Mr XXX is employed by the South African subsidiary of a multi-national company. Due to his specialised knowledge he was seconded to the XX subsidiary on XXX where he worked until XXX.

QUESTION
Is the income derived from the services rendered in Botswana exempt from income tax in the 2014-2015 year of assessment?

ANSWER
The number of days during which remuneration was derived from services rendered in Botswana in the 2014-2015 year of assessment is as follows:



The services rendered in Botswana were to an employer for the period XXX to XXX. It is clear from the above table that this period includes an aggregate period of 183 days and a continuous period of 60 days which will fall into the 12 month period commencing in the year of assessment i.e. XXX to 18 XXX and the 12 month period ending in the year of assessment i.e. XXX to 18 XXX.

The following steps was used to arrive at a conclusion:

a) Is the taxpayer a person referred to in section 9 (1) (e) of the Income Tax Act?

No.

b) Was remuneration received or did it accrue in respect of services rendered outside the Republic during the year of assessment?

Yes, for the period identified in the table.

c) Was the taxpayer outside the Republic for more than 183 days in total during a 12 month period that commences or ends during the abovementioned year of assessment?

Yes.

Qualifying 12 month period commencing in year 2014 and ending in the 2015 year of assessment can be identified as:

XXX to XXX

It is clear from the table that this period will encompass a period of absence of more than 183 days outside the Republic.

d) Was the taxpayer’s absence continuous for more than 60 days during the same 12 month period mentioned above?

Yes.

The period of XXX to XX the 60 day continuous period was form the XXX to the XXX.

The period from the XXX to the XXX are continuous and adds up the 61 day out of the Republic of South Africa.

e) Were the services rendered during the 183 day and 60 day periods?

Yes.

f) Conclusion

The remuneration from the employer for the services rendered in Botswana for the 2014 to 2015 year of assessment is exempt from income tax in South Africa.