Tax Residents

1. As of 2021, YOU, a South African tax resident, are obligated to file annual tax returns with the South African Revenue Service (SARS), disclosing your global income and claiming any exemptions or tax credits for foreign earnings.

It is important to note, that unless you explicitly register as a non-tax resident with SARS, you will be considered a tax resident within South Africa. This status remains even if you do not meet the standard residency tests, such as the ordinary residence test and the physical presence test, or if a Double Taxation Agreement exists. Your tax residency status can only be altered through the proper legal procedures with SARS.

SARS has recently introduced a document known as the “ SARS Non-Resident Tax Status Confirmation Letter,” which serves as official confirmation of one’s non-resident tax status. Therefor, if you live and work in the USA and currently earn more than $66 000 a year (R1.25 Million), then any amount over the $66 000 threshold will be taxed (18% - 45%) in South Africa.

Income Tax Act

The act on the website reads as follows:  "Section 10(1)(o)(ii) of the income Tax ACT 58 of 1962 which provides a tax exemption of R1.25 Million per annum on foreign employment income with a 45% taxation imposed above this cap."

(NHI) Fund 

The fees used for to fund it include:

✔ General taxes

✔ Contributions of persons earning above a set amount,

✔ Monthly contributions made by the employees to the fund.