Tax & Foreign Employees

Top Tip: Do you need to apply for a directive for the relief from South African tax on pension and annuity income or want a refund of tax that was withheld, click here for more information.
We have a full guide to help you through the ‘ins and outs’ of taxation in South Africa but here are a few basic principles to guide you through. 
  • South Africa’s tax system changed from a source-based system to one based on residence for years of assessment commencing on or after 1 January 2001. This meant that a resident would be subject to tax on worldwide income, and that a non-resident would be subject to tax on source.

  • In simple terms, a foreigner may be liable for normal tax on income earned in South Africa. You'll pay the same as a South African National and you’ll be entitled to some of the same exemptions and deductions.

  • You need to be aware that the tax status of a non-resident may differ from country to country. So, as a foreign employee, you will need to determine your tax status in South Africa. Should you, as a foreigner, at any stage meet the requirements as a tax “resident”, you will be subject to tax on worldwide income, excluding any applicable exemptions or deductions.

  • It is internationally accepted that income from employment is usually taxed at source (where the services are actually rendered) irrespective of the place where the employment contract was entered into. This means that if, as a foreign employee, you render services in South Africa, the amount earned from services rendered will be subject to tax in South Africa. There are however some exceptions affecting temporary employment and employment by a foreign government.

  • Your tax position as a foreign employee may be affected by an agreement for the avoidance of double taxation between South Africa and a foreign government (tax treaty). In addition, should double taxation occur, in that an amount is subject to tax in more than one country, the relevant tax treaty can be examined for any applicable tax relief.

For further information on tax for foreign employees, please refer to the Guide on the Taxation of Foreigners Working in South Africa.

So read the guide but please remember that if you are liable to pay income tax, you must register as a taxpayer at SARS within 21 business days of becoming liable for tax.
For more information on registering as a taxpayer please visit our section on registration.
Last Updated: 06/12/2018 3:49 PM     print this page
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