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Work over Internet and want to pay taxes! How?

Posted 28 January 2013 under Tax Questions



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For the past 5 years I have been doing work over the 'internet' for an international company. Only now I have become aware of having to pay taxes. I am not registered. For the last 2 years I've received a steady income of R6 000 / month. I don't have a physical address or contact number for the company as we communicate through email. The company email me sketches of a building then I create a 3D model of the building and send it back.
How will paying taxes work for me ? Will there be penalties involved for the money I already received over the last few years?

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TaxTimTaxTim says:
29 January 2013 at 20:44

You would need to go back and have a look at the exact amounts earned each year and see if you are over the tax threshold. However for the last two years you have been over the threshold.

Given that you are not formally employed you will need to show SARS proof such as the invoices you give the company every month or bank statements if they ask.

It would be best to register as a taxpayer now - https://www.taxtim.com/za/get-a-tax-number.php


Zee says:
1 February 2013 at 11:16

Thanks for the reply and advise. I appreciate it!

Can you also advise me on the following:

I have two accounts, both on my name. In Account 1 - I receive my monthly 'salary', which I then transfer to my savings Account 2, which I use then for personal things.
Because I'm staying in someones house, I also take care of some things (the owner is overseas), so in Account 1 I also receive money to pay the owners ADSL line, the gardener , electricity ect.

So Account 1 is used for non personal things, and in Account 2 is my Salary which I use.

Will SARS also want to know about the money in Account 1 and Tax me for that (which doesn't make sense cause the money is not for me), what do I do regarding to that? Do I only have to give them information for Account 2 where I receive my monthly income.

Hope this make sense.

Thanks!


TaxTimTaxTim says:
1 February 2013 at 11:24

You only need to complete, on your tax return, the amount that you earned as income. You are free to transfer your money between as many bank accounts as you wish, as long as you declare all the income earned.

The money that you get to pay over for the adsl etc is not income as you are just being asked to settle these accounts using their money which they give to you briefly. I'm guessing you don't make a profit on this so then it would not be seen as income in your hands.

I hope this answers your question:)


Zee says:
1 February 2013 at 11:42

Wow, thanks for the quick response. Really appreciate it. I have one last question I forgot about.

I emailed the company I do work for and said I have to register for tax, bear in mind that it's an overseas company. Are there any documents they need to give to me besides a payslip (which I haven't received up to now). Will I be able to contribute to UIF and a pension fund from my side?

Again thanks for your advise!


TaxTimTaxTim says:
4 February 2013 at 17:50

You won't be able to contribute to UIF, but you can take out a pension fund policy which you would pay for each month however there will be a tax deduction at year end when you submit your return.


Zee says:
5 February 2013 at 9:20

Thanks for all your advice! Will definitely give TaxTim a try once I'm registered.


TaxTimTaxTim says:
5 February 2013 at 18:37

Only a pleasure! Always happy to be of assistance!


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