Tax - Income from two countries

[KCN]

Hi,

I've been working in Canada for 6 months and have been paying tax here.

I have a flat in SA that I rented out last month. I make about R2000 profit from this flat.

What tax rate will I be paying on this profit?

 

[Whatzmyname]

If you have been out of SA for longer than 183 days you are tax exempt.

 

[Voicy]

If you have been out of SA for longer than 183 days you are tax exempt.

For foreign income.

Local income still gets taxed as usual afaik.

So your foreign salary will get taxed in canada according to their regulations, but the flat profits will go to SA as usual.

 

[HavocXphere]

For foreign income.

Local income still gets taxed as usual afaik.

So your foreign salary will get taxed in canada according to their regulations, but the flat profits will go to SA as usual.

Correct. The 183 day rule decides whether you're a resident for tax purposes or not

Resident >> Global income
Non-Res >> Source based taxation, so just SA income

 

[KCN]

I've been here over 183 days so I'm a resident.

My income in Canada gets taxed through the company.

I'm wondering about my rental income, at what rate will I be taxed? 18%, 40%?

 

[HavocXphere]

I've been here over 183 days so I'm a resident.

My income in Canada gets taxed through the company.

I'm wondering about my rental income, at what rate will I be taxed? 18%, 40%?

You seem quite confused. Try reading this
http://www.fin24.com/Money/Money-Clinic/Tax/Tax-when-working-abroad-20130913

As for the tax rate it'll be whatever tax bracket you fall under

 

[Snick]

I'm glad to see this thread as I'll be in the exact same boat in the coming months, i.e. Working and living abroad but earning local rental income.

 

[cguy]

I'm glad to see this thread as I'll be in the exact same boat in the coming months, i.e. Working and living abroad but earning local rental income.

BTW, if you're in the US (or Libya I believe - not sure if anyone else does this, but the US is a big one), you get taxed on global income. This sucks - I get taxed on any SA income at my US marginal rate.

 

[KCN]

Sorry this still is not clear to me....

Say my annual Salary in Canada is R450 000 and I get taxed around 16% - Paid for out of my salary.
Then In SA I get R24 000 Rental Income - How much can I expect to pay for this?
Based on the table below will I pay
-18%*R24000=R4320 as R24 000 is between 0-R188000
or
-36%*R24000=R7680 as R450000+R24000=R474000 is between R406401–R550100


2017 tax year (1 March 2016 - 28 February 2017)

​Taxable income (R) ​Rates of tax (R)
0 – 188 000 18% of taxable income
188 001 – 293 600 33 840 + 26% of taxable income above 188 000
293 601 – 406 400 61 296 + 31% of taxable income above 293 600
406 401 – 550 100 96 264 + 36% of taxable income above 406 400
550 101 – 701 300 147 996 + 39% of taxable income above 550 100
701 301 and above 206 964 + 41% of taxable income above 701 300

 

[Stefanmuller]

You won't pay any tax as the R24k is below the threshold (R75k). You are still a SA resident so will pay tax in SA on your world wide income, but your foreign salary will be specifically excluded if you are out of the country for at least 183 days in total and at least a continious period of 60 days. So just the rental income will be included but will not attract tax because of it being under the threshold.

You should check whether you can claim back the tax deducted on your salary from the Canadian authority. I know of a few people who work abroad and pay no tax, but I think in most of those cases the employer is also foreign to that country (as in a SA company paying you to work in Canada). Each country obviously has its own laws on that.

 

[Voicy]

You won't pay any tax as the R24k is below the threshold (R75k). You are still a SA resident so will pay tax in SA on your world wide income, but your foreign salary will be specifically excluded if you are out of the country for at least 183 days in total and at least a continious period of 60 days. So just the rental income will be included but will not attract tax because of it being under the threshold.

You should check whether you can claim back the tax deducted on your salary from the Canadian authority. I know of a few people who work abroad and pay no tax, but I think in most of those cases the employer is also foreign to that country (as in a SA company paying you to work in Canada). Each country obviously has its own laws on that.

This.

Also if you're not tax exempt in Canada, just check their tax laws. E.g. in Norway I get a 10% discount on my taxable amounts (up to a max amount) for the first 2 years of being here. So Canada might give you a "new guy" tax break of X amount, but as far as SARS is concerned, you don't have any other income than your rental.

 

[katastrofie]

If the foreign income is tax exempt in SA, does it still need to be declared on the SA income tax return?

 

[KCN]

You won't pay any tax as the R24k is below the threshold (R75k). You are still a SA resident so will pay tax in SA on your world wide income, but your foreign salary will be specifically excluded if you are out of the country for at least 183 days in total and at least a continious period of 60 days. So just the rental income will be included but will not attract tax because of it being under the threshold.

You should check whether you can claim back the tax deducted on your salary from the Canadian authority. I know of a few people who work abroad and pay no tax, but I think in most of those cases the employer is also foreign to that country (as in a SA company paying you to work in Canada). Each country obviously has its own laws on that.

Thank you that clears it up.