How to legally minimise your taxes
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.
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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.
: 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.
: 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.
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