The South African Revenue Service (SARS) has revised its guide for individuals not resident in South Africa about the tax treatment of South Africa-sourced income.
The guide addressed the point that foreigners working in South Africa are only liable for income tax on income earned by them in South Africa, irrespective of where or by whom that amount is paid (subject to possible double taxation relief). Non-resident foreigners have to register with SARS and complete a tax return if their South African income exceeds the minimum earnings threshold. In addition, South African employers must deduct pay-as-you-earn (PAYE) income tax from a foreigner’s income for those services rendered in South Africa (including from any salary, bonus, benefits, and allowances).
The guide confirms that income received by a foreigner for services rendered inside and outside South Africa could be apportioned based on the number of days worked in and outside of South Africa during a year of assessment. The Guide also contains an explanation of the separate rules applying for payments to foreign entertainers or sportspersons. A resident making a payment to such an individual must deduct or withhold a final 15 percent tax from that payment, and transmit the tax withheld to SARS on behalf of the foreign entertainer or sportsperson before the end of the following month.
