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Do I pay tax in SA as a non-resident working in SA for a US university?

Posted 22 March 2016 under Tax Questions



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Charles says:
19 March 2016 at 21:43

I am a US citizen living here in South Africa for about two years because of my spouse's work. The university I work for has graciously allowed me to continue working remotely for them while I am here. I work with computers on the internet. Recently, someone from my work has insisted that I needed to file for income tax in South Africa. I disagree, believing that my income source is not South African and that I am a non-resident for tax purposes. Is there some specific evidence I can use to back up my claim? Or, am I wrong? The people I work with, the location where my work is actually used, where my paycheck comes from, the bank it goes into, are all in the US. None of it has any relation to South Africa, other than my presence here.

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TaxTimTaxTim says:
21 March 2016 at 13:21

Do you work for a University in the States? How long have you been here and how long are you planning on staying?


Charles says:
21 March 2016 at 16:05

I do work for a University in the States. We got here 2 October 2014 and will be leaving this July.


TaxTimTaxTim says:
22 March 2016 at 9:41

You won't need to register to pay taxes in South Africa.


Charles says:
22 March 2016 at 10:19

Thanks for that, but sorry, I was hoping to have some specific documentary evidence that would convince the folks insisting that I do need to pay taxes here. That some guy on the internet says so is not going to be enough for them. I would be happy to pay a fee for this sort of information if such efforts go beyond what can be expected from this free service.


TaxTimTaxTim says:
22 March 2016 at 11:39

You are seen as a non-resident for tax purposes as you meet the criterion, or rather do not meet the criterion to be considered resident. Go through our questions on Am I a tax resident of South Africa?

For the purposes of paying tax in South Africa - do you currently pay taxes in the US?


Charles says:
22 March 2016 at 15:06

Thanks for that. I understand that I am a non-resident for tax purposes. I do pay taxes in the US. The crux of the issue is the definition "South African source". Does it have the obvious meaning of "where the money comes from", or in this context does it have the special meaning of "where the work was done"? I prefer to think the former, but would like to know that SARS thinks so, too.


TaxTimTaxTim says:
22 March 2016 at 16:05

Generally SARS will only tax the income earned in South Africa when you actually earn the income from a SA source of foreign source for work performed IN SA which really means as in working for a South African company or a foreign company with a permanent establishment in SA. So if you were to come and work for UCT for example, but actually on secondment from Harvard or if you worked for Royal Dutch Shell in the Netherlands and then came to work for Shell in SA. That would be the case where you do work which contributes to South Africa.

In your circumstance you are merely a "floating worker" - if you happened to go to Thailand and live there for a few months doing what you did working online then it would not make sense to be taxed in Thailand, much like in SA. Given that you are taxed in the US and one could safely presume you to be a US tax resident for the purposes of the Double Tax treaty it would not make sense to pay tax in SA. The source of your employment is the US, the result of your work is the US.


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