When it comes to tax between countries, there are bound to be a host of complications along the way.
But SARS isn't having any of it! They want international tax to be done right. And if you fail to do it the way they want, you'll face heavy penalties.
So take note of these 3 warnings from SARS today, and make sure that you are getting your international tax 100% correct every time...
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Apply the conversion rates correctly.
If you have to use a spot rate, but use the average rate, you could receive a horrible surprise. In other words, let's say the average rate is R6:$1, but the spot rate at the time of the transaction is R9:$1. If you make a $100 000 profit, you must pay tax on R900 000, and not on R600 000.
R300 000 is a massive difference, so don't get this wrong!
Whatever you do, never try to hide international tax from SARS!
Tax commissioners will be in communication with each other. They are always keeping up-to-date with the various methods tax evaders use. So the chances of you being caught are extremely high!
Ensure that you always use the most recent double tax treaty. In other words, ensure that you always have the latest double tax treaty between South Africa and the country you'll transact in.
Articles can change or be different depending on the country. So if you are unsure of what these are for the country you'll transact in, speak to a registered tax practitioner as soon as possible.
*Those were 3 big warnings SARS gives regarding international tax.
Take note of them and ensure that you get it right.
To learn more on international tax, such as how to manage a double-taxation problem and much more, page over to Chapter I 01
in your Practical Tax Loose Leaf Service
handbook today, or click here
to order a copy if you don't already have one.
How to legally minimise your taxes
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