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Taxation as a non-resident - possibility of double taxation on income earned in a foreign country

Posted 21 November 2013

Dear TaxTimI worked 3 months (March - May 2012) of the 2013 financial year in South Africa (for which I have the IRP5, included in my efiling ITR12), the total amount earned was R24,850. Since then, from June 2012 to present, I have been employed on a full time basis and continuously present in Chile (the period exceeds the number of days required to qualify me as non-resident for tax purposes in SA - 183 days) - for all of the 2013 tax period, I have not paid tax on this income in Chile, due to the delay in regularizing my legal status regarding residency and right to work - tax is being withheld by the organization I work for, and now that I am legalized, will be back paid at some point. However, as result I have no official record of any taxes paid on this income earned in Chile up to this point, so I am concerned regarding the possibility of double taxation in South Africa - I do not believe that SA and Chile have a double taxation agreement. I earn no other income apart from my current salary in Chile; also, I wish to maintain my tax base in SA, and plan to return in just over a year. My questions are, firstly - am I required to submit a tax return in SA based on the above info, and secondly, is there the risk that I will be double-taxed on this income, given that I have no proof of tax paid to Chilean authorities as yet? I assume that I am correct in my understanding that I should not liable to be taxed on this income in SA? Any advice will be much appreciated.Regards

TaxTim TaxTim says:
22 November 2013 at 0:28

You are not liable for tax in South Africa based on s10(1)(o)(ii) which exempts foreign income if you meet the requirements which you do appear to do so. You will not pay tax on your SA earnings either as you earned below the threshold, but I suspect you had PAYE deducted so that is worth submitting to claim that tax back.

You can either leave out your foreign income or you can include the amount under the "amounts not considered taxable" s10(1)(o) space.

Non-resident says:
22 November 2013 at 0:51

Thanks Tim, that helps a lot.

Yeah code 4102 on the IRP5 shows an amount paid for PAYE - how do I go about applying for a refund of that?

Best regards

TaxTim TaxTim says:
22 November 2013 at 0:53

Submit the return as is, with the IRP5 information. SARS will do the rest!

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