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Do you have employees working outside SA? Find out here if they're exempt from tax

by , 22 March 2016
If you employ someone who works outside the country, you may be wondering how exactly you would tax them.

Well, you need to ensure you get it right, otherwise harsh SARS penalties potentially await you.

Here's what you need to know when it comes to taxing employees who work outside of South Africa...

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The general rule is that any income received by a South African resident from services rendered outside of South Africa, during the year of assessment, is exempt from tax.
 
But this general rule only applies under the following 2 sections…
 
Section#1: Crew member of a ship
 
Any South African resident who earns income as a crew member or an officer is exempt from tax. But only if he they render their services outside of South Africa for a period of at least 183 full days in a year.
 
Section#2: Services rendered outside of South Africa
 
Any payments South African residents receive for services provided outside of South Africa are exempt from employees' tax. But only if the services they render are:
 
·         For or on behalf of any employer (South African or foreign);
·         For a period exceeding 183 full days in total;
·         During any 12-month period;
·         Starting or ending during the year of assessment; and
·         They are out of the country for a period of more than 60 full days during that 12-month period.
 
 
NOTE: A resident employee is considered 'outside' South Africa if she's in transit between two countries. In other words, she doesn't actually enter South Africa through a port of entry.
 
ALSO: It's worth noting that this exemption doesn't apply to directors, other company office bearers or anyone employed in the provincial or national government.
 
 
 
*If you want to learn more on this important tax issue, including many others, simply page over to Chapter S 12 in your Practical Tax Loose Leaf Service handbook, or click here to order your very own copy today. 

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