South Africans living and working abroad should be doing more to prepare themselves for the implementation of the country’s new expatriate tax on 1 March 2020.
That’s according to Ruaan van Eeden, Managing Director, Tax Advisory at the Geneva Management Group (GMG).
Under the new legislation, South African tax residents abroad will be required to pay tax to SA Revenue Service (Sars) of up to 45% of their foreign employment income, where it exceeds the R1m exemption threshold.
The only practical ways to avoid doing so are to financially emigrate through a formal process which, as a consequence, ceases tax residency, or to cease tax residency, without the need to formally emigrate.
But, van Eeden warns, many South Africans living abroad aren’t aware of the new requirements or the consequences or choosing to follow the financial emigration or cessation of tax residency route.