South African high-salary expats furious over proposed new tax law

Published:  8 Mar at 6 PM
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In spite of its condemnation by several panels of experts, the South African government is determined to go ahead with its controversial new expat tax laws.

As the rules stand today, South African nationals working overseas for over 183 days – 60 of which must be consecutive – ar exempted from paying home country taxes on their earnings. Once the new amendment are enacted, South African expat professionals in high-salaried positions overseas must pay home country taxes of up to 45 per cent of their earnings once they exceed 1 million rand ($75,000) per annum. Unsurprisingly, the new legislation has caused fury and disbelief amongst the top-talent SA expat community overseas, as well as uncertainty and confusion. Many believe the rule will be unenforceable, with others believing they’ll be exempt.

One SA tax consultant recently attended a workshop by officials from the National Treasury, intended to help those affected understand its complexities. After the workshop ended, the consultant told reporters help in the meaning of the word is definitely not on offer as it seems public consultancy and answers to expats’ concerns isn’t on the politicians’ agenda. Tax consultants believe the new rules with hurt the country’s economy and its workforce far more than the expat victims of the SA taxman’s raid on their salaries, as no expat in his or her right mind would accept a reassignment without extra allowances covering the potentially huge tax losses.

Another, consultant mentioned a very irate client who’d attempted to get out of the tax hike by arranging financial emigration to the island of Malta, a well-known destination for those wishing to ameliorate their tax liabilities. However, in this case, it was the wrong thing to do based on the client’s financial specifics as it involved SARS and SARB-related fraudulent statements. As a result, it seems the South African government and its tax officials have the issue well and truly sewn up, thus severely limiting any attempts by the mega-wealthy to avoid tax liabilities.
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