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DISCLOSE YOUR UK EARNINGS TO SARS?
South African Revenue Service wants you to file a tax return on your worldwide income
by HEATHER WALKER ast week many South Africans living in Britain were outraged to discover that the South African Revenue Service (SARS) expects them to declare their worldwide income. But is this the full story? According to the SA Promo website, SARS this month launched a Five Year Compliance Drive on all South African residents working abroad. This comes after South African Minister of Finance, Pravin Gordhan, mentioned in his Budget Speech that SARS is going to target South Africans in foreign countries. “Your foreign income will NOT be taxed in South Africa, however, you are compelled by South African Law to have an Income Tax Number, submit a return to SARS every year and declare your worldwide income,” SA Promo stated. This applies even if: • You live more than 183 days abroad (including 60 continuous working days) • Your income is subject to Income Tax in the foreign country. • You created a Trust/CC/ Company in a foreign country into which the earnings are paid. South Africans reacted to this news with characteristic indignation – they posted comments such as, “That bunch of swindling criminals can go and get knotted. I refuse point blank to
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give them any indication of what I earn, it's because of them that all of us are here trying to earn money because they put us out of the job market because we are the wrong colour.” Another person wrote, “Dream on SARS! Where will you get our phone numbers anyways? And if you do get hold of us, exactly how will you make us face consequences?” We contacted Teresa Seaton, owner of Wordwide Tax, a company that specialises in both SA and British taxation, to find out whether all South Africans abroad need to declare their income. She explained “If you no longer reside in SA, don't have any assets there nor receive any income from SA you don't have to register. If you do have any of the above and don't declare worldwide income you can be severely penalised. However it does not mean that you will be taxed on all this income. Annually on a tax return we will look at days outside SA, double taxation agreements between SA and the country you’re earning income from etc. This rule has in fact been in place since 2001.” The SARS website states, “South Africa has a residence-based system, which means residents are - subject to certain exclusions taxed on their worldwide income, irrespective of where their income was earned. Non-residents are, however, taxed on their income from a South African source.”
INSIDE: SA Power 100 - 2012: Yusuf Timol | p13 Native Capetonian and Mister Economic at the SA High Commission, Yusuf Timol is passionate about building trade relations between Britain and South Africa.
Has SA education improved? | p3 Phumzile Mlambo-Ngcuka, former Deputy President of South Africa and founder of the Umlambo Foundation, addressed the SA Business Club on the successes and challenges in SA education.
South African Property Monthly | pull-out
THE AFRICAN BARD: South Africa’s Isango Ensemble kicks off the Globe to Globe festival in London this weekend with Shakespeare’s ‘Venus and Adonis’ in IsiZulu, IsiXhosa, SeSotho, Setswana, Afrikaans and English. Tom Bird of The Globe Theatre tells us how he sourced 37 plays in 37 languages for this glorious month of theatre. Story on page 7.
Looking to buy property in SA? You’ll want to read our monthly pull-out which features homes for sale, as well as your property questions answered by the experts.