Hi Tim. I am currently a South Africa provisional taxpayer but will be leaving SA to work for a US based company for the next 5 years . I will be leaving on the 30 June 2014 but will receive a pension payment commencing 1 July 2014 from my current employer for the next 5 years payable in South Africa . I will also receive a bonus in December 2014.
I will be out of the country for more than the 183 days as well as the 60 day consecutive period . My question is as follows :
1. Is the monthly pension taxable 2. Is the bonus payment in December taxable .
The amounts are taxable as they arise from income earned from a South African source regardless of where you will be working in the future. Given that you are still seen to be an ordinary resident of SA (that means unless you officially emigrate, you are seen to be temporarily abroad) and therefore ultimately your tax responsibilities are in South Africa.
However due to exemptions in the law the income earned while outside of South Africa will not be taxable going forward.
The pension etc is taxed because this arose out of income earned while you were in SA.
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