Hi All
This is Worldwide Tax solutions news letter that will be frequently updated, and you are most welcome to pass it on to any possible new clients.
I just need to give you all clarity on one aspect that no one seems to know. Even though you might be exempt on the income that you receive from your offshore activities, you still HAVE TO submit annual returns to the South African Revenue services, with the required proof to substantiate the reasons why you are exempt. SARS then in turn will check all documentations and then advise you/your tax consultant if approved or not.
The section of the income tax act that you all could possibly qualify for exemption is names Section 10(1)(o). This section in turn has 2 part of which i will discuss in detail for you.
Subparagraph 1 of Section 10(1)(o):-
o) any remuneration as defined in paragraph 1 of the Fourth Schedule –
i) derived by any person as an officer or crew member of a ship engaged –
aa) in the international transportation for reward of passengers or goods; or
bb) in the prospecting (including surveys and other explanatory work) for, or the mining of, any minerals (including natural oils) from the seabed outside the continental shelf of the Republic as contemplated in section 8 of the Maritime Zones Act, 1994 (Act No. 15 of 1994), where such officer or crew member is employed on board such ship solely for the purposes of the ‘passage’ of such ship, as defined in the Marine Traffic Act, 1981 (Act No. 2 of 1981),
if such person was outside the Republic for a period or periods exceeding 183 full days in aggregate during the year of assessment; or
In basic terms what this means is if you are a officer or crew member of a ship that trades in international transportation or involved on a ship in the prospecting of minerals or oils from the seabed, you only have to be outside of SA for a period exceeding 183 days during the tax year which runs from 1 March to 28 February of the next year. PLEASE NOTE – there is no 60 days continual period at all.
The definition of ship includes a barge or a vessel.
If this requirement is not met then we can try under the next subparagraph.
Subparagraph 2 of Section 10(1)(o):-
ii) received by or accrued to any person during any year of assessment in respect of services rendered outside the Republic by that person for or on behalf of any employer, if that person was outside the Republic –
aa) for a period or periods exceeding 183 full days in aggregate during any 12 months period commencing or ending during that year of assessment; and
bb) for a continuous period exceeding 60 full days during that period of 12 months, and those services were rendered during that period or periods: Provided that –
A) for purposes of this subparagraph, a person who is in transit through the Republic between two places outside the Republic and who does not formally enter the Republic through a port of entry as defined in the Immigration Act, 2002 (Act No. 13 of 2002), shall be deemed to be outside the Republic; and
B) the provisions of this subparagraph shall not apply in respect of any remuneration derived in respect of the holding of any office or from services rendered for or on behalf of any employer, as contemplated in section 9(1)(e);
This section will apply to any other person that works for an employer outside SA. To qualify for this exemption you will need to meet the following requirements:-
- During any 12 month period, in other words if you left the country for the first time for employment on 2 August 2000 then your 12 months could run from 2/8/00 – 1/8/01.
- a period of at least 183 full days in total during this 12 months
- of this period of at least 183 full days, 60 days has to be continuous.
Should any ONE have any enquiries or wish that i check up and correct their tax status, feel free to contact me at any time.
Kind Regards
Teresa Louw
Worldwide Tax Solutions
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