If you’ve worked overseas while you were a resident of South Africa you may be exempt from South African tax for the period you worked abroad.
The exemption is a condition of Section 10(1)(o)(ii) of the Income Tax Act 1962.
Do you qualify for foreign service tax exemption?
Whether or not you qualify for an exemption depends on the duration of services rendered outside South Africa for or on behalf of an employer and is dependent on the following conditions;
- you worked outside South Africa for a period or periods exceeding 183 days in total over a twelve month period starting or ending during the respective tax year.
- during the 183 day period, you were absent from South Africa for at least a 60 day continuous period.
If SARS withheld tax on the remuneration received for your foreign service term and you meet the required conditions, your overpaid tax must be refunded to you.This means you may qualify for an exemption on a portion of your lump sum or annuity income on retirement or withdrawal.
Let cashkows help you out
Our tax specialists have a deep understanding of tax legislation across borders, which means you’re in the safest hands. We’ll ensure full compliance while keeping your tax obligations to a minimum and ensuring you get any refunds due to you.
Help with other tax requirements
We offer a complete tax solution for South Africans living abroad. We can help you out with other aspects of your cross-border tax, such as:
- reactivating and updating tax records
- registering and de-registering with SARS
- processing refunds
- claiming disallowed pension contributions
- submitting returns
- obtaining tax clearance certificates
- obtaining tax directives
- dispute resolution
- capital gains tax calculations
- general tax enquiries
If you would like assistance with your taxes or think you may be due a tax refund, simply leave your details and one of our specialists will contact you for a free consultation.