Foreigners are also regularly coming to impart skills in South Africa. A significant number of European migrants have entered South Africa due to the economic challenges in the European Union. There are certain decisions to be made in terms of the tax status of these inbound expatriates.
The tax implications are as follows:
- A non-resident rendering services in South Africa will be required to register as a taxpayer and render a tax return on their income earned in South Africa.
- The ex-pat will need to establish if they are likely to be classified as ‘ordinarily resident’ for tax purposes. The criteria that need to be met were explained earlier in these notes. Once this person becomes ‘ordinarily resident’ they will be required to declare their worldwide income in South Africa. They would however be well advised to consult with a tax practitioner with experience in dealing with double taxation agreements, as this may exclude certain income from taxation, or offer tax credits where tax was also paid in a foreign territory.
A guide detailing the taxation of foreigners is available on the SARS website. It is very comprehensive and covers the qualifying criteria, the concessions available to such people and the fringe benefits applicable.