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I receive a salary from Taiwan, but pay tax there. What do I do?

Posted 9 May 2013 under Tax Questions



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I have recently returned from overseas and I'm planning to stay in South Africa. I'm about to start teaching online for a Taiwanese company and will be taxed 18% in Taiwan if I make more than $893 with them (which I plan to do). I just want to know if I have to pay tax here in SA on that income. It seems a bit harsh to pay 18% and then another x% here at home. Is this going to be unavoidable? The amount in my bank account every month should be between R7 000 and R10 000. If I have to pay full taxes on that, I was thinking of keeping back about 25%, but I first want to find out whether there are any lenience I can get since I'm already taxed in Taiwan.

Thank you for the great service. I'm looking forward to your help with my tax return.

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TaxTimTaxTim says:
9 May 2013 at 12:37

Firstly thank you for your complimentary words!

You will never have to pay tax twice on the same income, if the Taiwanese company withholds 18% before paying you the amount owed then this tax already paid will go towards your South African tax. In your case of earning, lets say R120 000, for the year you will actually not have to pay South African tax as the 18% withheld exceeds the amount of overall tax paid in SA on that level of income.

Basically SARS allows a tax credit/rebate of any taxes paid in another country for income earned against South African tax. You must get a certificate or some document proving this.


Reyno says:
9 May 2013 at 13:20

Thanks for the great reply, it's very helpful. That's really good news. I will be getting a tax document from the Taiwanese company, I'm not sure if it's monthly or annually yet. So, I just submit this with my tax return form?

(Of course with the help of Tim early next year.)


TaxTimTaxTim says:
9 May 2013 at 14:49

Only a pleasure! When you complete your return you will be asked for foreign earnings and then the taxes paid (Tim will guide you through this). Only if SARS asks for verification of documents will you be required to submit the letter, but it is best to have it just in case.


Reyno says:
9 May 2013 at 16:37

Thanks again.


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