National Treasury has shared their response on the expatriate tax exemption and this appears a win for most expatriates. The high income earners will be caught by this change, but there is ample opportunity for planning hereon as the proposed implementation has been moved to 01 March 2020. The main win is noted below and based on the survey we have submitted, about 60% of expatriates will not be affected. The other 40% will have low taxes, especially with pro-active planning. The main change is that:

“the first R1 million of foreign remuneration to be exempt from tax in South Africa if the individual is outside of the Republic for more than 183 days as well as for a continuous period of longer than 60 days during a 12 month period. The exemption threshold should reduce the impact of the amendment for lower to middle class South African tax residents who are earning remuneration abroad. The effect of the exemption will also be that South African tax residents in high income tax countries are unlikely to be required to pay any additional top up payments to SARS.”

There are far more in-depth policy decisions hereon impacting various South Africans, including the exempt and high-income earners. It remains critical for expatriates to note that they must get their personal tax affairs in order, as they are no doubt part of the focus area of SARS and National Treasury.

We will unpack the balance of comments and impact under separate cover.