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What are the benefits of non residents for taxable income in South Africa?

Posted 1 March 2013 under Tax Questions



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I am living overseas for the past ten years and have visited South Africa occasionally for not more that 3 weeks per annum. I earn interest (R24500); dividends from private companies (R65000); retirement annuity income (R17500) amounting to approximately R110K per annum. I am paying taxes as a resident. What will my taxes be like if I were to be taxed as a non resident. Will I still be entitled to the rebates. I am 62 years old and am married in community of property. I will appreciate a hypothetical calculation of my taxes as a non resident.

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TaxTimTaxTim says:
1 March 2013 at 11:11

As a non-resident, so if you formally emigrate and give up your South African citizenship and therefore tax status there would be different consequences. However if you do this then any property or assets you have in SA would be seen to be "sold" and if there is any capital gains tax to be paid this would need to be settled before SARS lets you settle your tax status.

As a non-resident however the following would apply:

Interest - this would be subject to a full and final 15% withholding tax as would dividends, the retirement annuity income would be subject to the normal tax rates, as it is earned from a South African source. However at that amount this would fall below the threshold.

Depending on which country you live in, you may still be subject to further taxes in that country or in the reverse no withholding taxes in SA as there may be a double tax treaty in place which eliminates South African withholding tax.


DP says:
1 March 2013 at 22:54

Thank you very much. I do not intend to emigrate not give up my South African citizenship. Can I still be categorised as a non resident for tax purposes. I do not want any of my South African assets to be blocked.

As a non resident (and non immigrant) can I still get the
1. Primary Rebate
2. Interest exemption up to the maximum allowed per year

Please indicate a pro forma tax return and assessment based on the figures that i have given with me being a non resident and non immigrant.

Thank you.


TaxTimTaxTim says:
4 March 2013 at 12:46

1. Primary rebate is still applicable to all natural persons regardless of the status of residency.
2. There is a separate tax which comes into affect on 1 July 2013 withholding 15% of the interest paid to non-residents, similar to dividends.

In your case:

Interest Dividends Annuity
24500 65000 17500
Tax 3675 9750 0

There will not be any tax on the annuity as you will fall below the threshold.

It actually would be better to remain resident as then you will be allowed the R23 800 interest exemption and no tax on further amounts.


DP says:
4 March 2013 at 21:38

Thank you very much for your advice. I really appreciate it.


TaxTimTaxTim says:
5 March 2013 at 11:29

Glad I could be of assistance!


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