Starting a new chapter outside South Africa is exciting — new places, new cultures, new opportunities. But as every expat quickly learns, there is one old thing that follows you everywhere: tax. If you’re earning foreign income abroad, it’s completely normal to question whether SARS can still take a chunk of your paycheque, what your tax residency status is, and which rules apply to you.

Here’s the good news: South Africa’s tax system gives you several legitimate ways to protect your foreign income from being overly taxed. Whether you’re abroad temporarily or permanently, there are routes to reduce or even eliminate your South African tax liability — if you understand how the rules work.

Top 3 takeaways for expats on protecting worldwide income from South African tax

1. Earning a salary abroad doesn’t automatically make it taxable in SA — the SARS section 10(1)(o)(ii) exemption contained in the Income Tax Act could protect up to R1.25 million of your foreign employment income.
2. Double tax agreements between South Africa and other countries can stop you from paying tax twice — but only when applied correctly. These are also only available to tax residents.
3. If you’re leaving South Africa permanently, you must update your tax residency status with SARS, by using the RAV01 form to begin the process of formalising your tax exit from South Africa.

1. Exemption under section 10: your first layer of foreign income protection

If you’re still a South African tax resident, SARS expects you to pay tax on your worldwide income. This is known as expat tax in South Africa. But that doesn’t mean you’re left without relief. The section 10 SARS exemptions are designed exactly for taxpayers who work outside the country.

Section 10(1)(o)(ii): The expat’s go-to exemption

This is the main foreign income tax exemption that South Africa uses to protect SA tax residents earning overseas. If you qualify, you can exclude up to R1.25 million of your foreign employment income from South African tax.

To qualify, you must:

• work outside SA for more than 183 days in any 12-month period, and
• have at least 60 of those days continuous.

Expats often refer to this as the South African tax residency/183 days rule, but remember — it only helps if you’re earning foreign employment income (i.e., you’re employed by someone). If you’re freelancing or consulting, the rule doesn’t apply.

How to claim the section 10(1)(o)(ii) exemption on your foreign income

You declare your foreign income in your tax return, provide supporting documents, and SARS applies the exemption if you qualify. Documents might include:

• employment contracts
• payslips
• travel schedules
• passport entry and exit stamps
• employer letters confirming overseas duties

The biggest mistake expats make? Assuming they qualify without checking the timeline or misunderstanding the “continuous days” requirement.

Read more: South African working abroad? How to handle foreign income on SARS tax return.

Section 10(1)(o)(i): The foreign income exemption for seafarers

If you work at sea, you’re not treated the same way as land-based expats — and that’s a good thing. The section 10(1)(o)(i) exemption exists purely for South Africans who earn their income outside the country while serving as officers or crew on qualifying vessels.

Here’s what that means in plain English:

• If you’re working on a ship beyond South Africa’s territorial waters,
• and that ship is engaged in a qualifying activity (like transport, fishing, exploration, supply, or research),
• then your foreign income may be fully exempt from South African tax.

Yes — fully. Unlike section 10(1)(o)(ii), which caps the exemption at R1.25 million, section 10(1)(o)(i) has no monetary limit. This is why it’s such a powerful tool for seafarers.

What types of vessels qualify?

Most standard commercial and maritime vessels, such as:

• cruise liners
• cargo ships
• supply vessels
• tankers
• offshore service vessels
• research ships
• fishing vessels

If you’re performing employment duties outside SA’s territorial waters, you may fall under this exemption.

Why section 10(1)(o)(i) is better for many seafarers

A common mistake we see? Seafarers assume they must use the section 10(1)(o)(ii) exemption because they work “abroad.” But s10(1)(o)(ii) is designed for land-based employees working in foreign countries, not for those working offshore.

And here’s the catch:

• 10(1)(o)(ii) has strict day-count requirements (183 days and a continuous 60-day stretch).
• 10(1)(o)(i) does not require this in the same way.
• 10(1)(o)(ii) is capped at R1.25 million.
• 10(1)(o)(i) has no cap.

So for many seafarers, using the wrong section can mean:

• paying unnecessary tax, or
• having SARS reject the claim, or
• missing out on a much better exemption.

Understanding which exemption applies to you — and using it correctly — can literally save you thousands in tax every year.

Read more:

• Sail away – the yachtie’s guide to South African seafarers tax.
• SA Yachties: the facts on the seafarers tax exemption in South Africa and how it applies to you.

2. Ceasing tax residency – how to become a non tax resident of South Africa

If your plan is to settle abroad permanently, relying on Section 10 Income Tax Act South Africa exemptions may not be the best long-term solution when it comes to protecting your foreign income from taxation. Instead, you may want to sever your tax ties with SARS completely. But this is where many expats get caught out.

A lot of South Africans assume that moving overseas means SARS automatically updates their tax resident status. It doesn’t. To formally become a non-resident, you need to go through the SARS tax emigration process, which starts with submitting a RAV01 form, and includes the SARS Declaration – Cease To Be A Tax Resident.

Read more: SARS Non-Resident Declaration – how to get confirmation of your tax non-residency.

What does it mean to cease tax residency in South Africa?

Once approved:

• you’re no longer taxed on your worldwide income
• you’re taxed only on SA-sourced income
• you avoid future confusion about your residency status
• you may still need to declare certain SA income, but tax is limited to SA sources only.

How to complete the RAV01 form SARS uses

You’ll find the RAV01 form on eFiling under “Maintain SARS Registered Details.” SARS will ask for documents proving your change in circumstances — usually things like:

• proof of foreign residency status
• termination of long-term SA ties
• foreign employment contracts
• permanent residence or long-term visas abroad
• proof of foreign home ownership or rental agreements

Once approved, SARS will issue a confirmation letter stating the date your residency ended. That letter is important — keep it safe.

Read more: How and why to obtain a SARS Non-Resident Tax Status Confirmation Letter.

A note on exit tax from South Africa

Ceasing tax residency triggers a deemed capital gains tax event. This sounds terrifying, but it’s just SARS taxing your worldwide assets at market value on the day your residency ends (with exceptions like fixed property in SA). It’s manageable, and planning ahead helps.

3. Double Tax Agreements – your international safety net

SARS has a broad network of South African tax treaties with other countries also called double tax agreements, to help prevent double taxation.

DTAs decide which country gets to tax which income. This is essential because many expats unknowingly pay tax twice — once in the foreign country and again to SARS — simply because the DTA wasn’t applied properly.

A DTA can:

• allocate primary taxing rights to the foreign country
• reduce your SA tax
• eliminate South African tax altogether on specific income types
• help determine your tax residency using tie-breaker tests

DTAs also interact with the section 10(1)(o)(ii) exemption, and in some cases, relying on the treaty may be better than using the exemption — especially if your salary exceeds the R1.25 million cap.

Which route should you take when protecting your foreign income from tax?

Most expats end up using a combination of these options over time. Your tax strategy should always align with your long-term plans, your earnings, and where you see yourself living in the future — not force you into unnecessary tax exposure.

FinGlobal: tax emigration specialists for South African expats

Looking to clarify your tax position? FinGlobal is ready to help you make it happen. Whether you need to complete tax emigration to cash in your retirement annuity, or you want to claim your foreign employment income exemption or a tax refund, FinGlobal can assist.

We’ve already helped thousands of South Africans simplify various aspects of their cross-border financial portfolios, and we can’t wait to do the same for you.

To find out more about our full suite of expat tax and financial solutions, leave your contact details below and we’ll be in touch to discuss your requirements.