National Treasury has proposed amendments to South Africa’s tax laws that will allow it to tax South Africans who work overseas and enjoy better tax rates, Times Live reported.
For example, if you are living in a country where the tax rate is 25% but your salary is big enough to be taxed at South Africa’s 45% bracket, the South African Revenue Service (SARS) will be able to collect the other 20%.
The report stated that the draft tax law amendments recommend completely repealing the exemption section 10(1)(0)(ii), which means foreign employment will become fully taxable, though you may still claim an exemption for taxes already paid in the foreign country.
Currently, the law requires that South African tax residents must disclose their total income earned world-wide, and then allows them to claim exemption on income earned outside the country.
Former finance Minister Pravin Gordhan said in his budget speech on 22 February that changes to this section of the tax law were in the works, but the suggestion was that the exemption should not apply where employees are not being taxed at all by a foreign country.
The amendments are to take effect from 1 March 2019, and stakeholders may submit their comments on the draft law by 18 August 2017.