The amended South African tax law is now in full effect as of 1 March 2020. Where you have international economic interests, your income may potentially subject to tax both in South Africa as well as in the foreign country, resulting in double taxation. As the co-authors of LexisNexis’ Expatriate Tax textbook, the first of its kind in South Africa, we have presented on the impact of the expat tax law change around the world. A common misconception we see among South African expats is that they believe they are “automatically tax-exempt” just because there is double taxation treaty in place between the two countries. This is completely wrong and there are various factors that need to be considered, and objectively proven, and you are still required by law to file a tax return and “claim” exemption under treaty relief.

To correctly apply treaty relief on your foreign earned income, you will need to consider which country will actually have the right to tax your income. This is achieved through a measured approach, known as the tie-breaker test, and takes into consideration various factors such as if you have a tax residency certificate, where you have a permanent home, where your centre of vital interests are, i.e. where your family and economic ties are, as well as where your habitual abode is, to name a few. Our team of astute tax attorneys are well equipped to assist you through the process to ensure your taxing rights does not fall within South Africa.