South Africa

EXPATRIATE AND EMPLOYER TAX COMPLIANCE AND ADVISORY
Tax rate Progressive tax rate: 0% – 45%
Tax threshold if younger than 65 years ZAR 78,150
Tax threshold if 65 years of age or older ZAR 121,000
For taxpayers aged 75 years and older, this threshold is ZAR 135,300
Tax period 1 March to 28/29 February
Tax residency / Domicile according to domestic law Established through either physical presence or through being considered ordinarily resident in South Africa.
Physical presence test:  where an individual is not ordinarily resident, he/she will be considered to be resident in South Africa if he/she is physically present in the Republic for a period exceeding 91 days during the current year of assessment as well as during each of the five preceding years of assessment, and he/she was physically present in the Republic for a period exceeding 915 days (or part-days) in aggregate during those preceding five years. Where a person who became resident by virtue of physical presence in South Africa, ..is outside the Republic for a continuous period of 330 full days after ceasing to be physically present in the Republic, that person will be deemed not to have been resident from the day he/she ceased to be physically present in the Republic.
The concept of ordinarily resident is not defined in domestic law and is widely held (based on case law) to be the country which an individual considers to be his/her real home. i.e. the place where his permanent place of abode is, where his belongings are stored, which he leaves for temporary absences and to which he regularly returns after such absences. If the taxpayer is habitually and normally resident in South Africa, apart from temporary or occasional absences of long or short duration or if he/she decides to settle permanently in South Africa, South Africa is recognized as being his/her real home and the individual will become a resident by virtue of ordinarily residence immediately.
Tax registration Required if tax resident and if non resident only if gross income from South African source or deemed to be from South African source
Employment income definition Any remuneration and benefits in cash or in kind received by an employee for services rendered under an employment agreement (e.g. reimbursrement or pyament of tax, school fee reimbursements, benefits in kind, cost of living allowances, home leave reimbursements, housing allowances).
Examples of tax exemption Reimbursements of properly documented business expenses (including business trip expenses, per diems, etc.) are not taxable.
Employer provided residential accommodation:
For purposes of determining the value of the taxable benefit relating to employer-provided accommodation, no rental value is placed on any accommodation provided by an employer to an employee while he/she is away from his/her usual place of residence outside of South Africa, provided the employee was physically present in South Africa: 1)for a period of less than 90 days during that tax year; or 2) for a period not exceeding two years from his/her date of arrival for purposes of performing his/her employment duties.  The concession above is limited to ZAR 25,000 per month during which the accommodation was provided during the tax year, for up to 2 years. This provision will only apply if that employee was not present in South Africa for a period exceeding 90 days during the tax year immediately preceding the date of arrival in South Africa.  If these conditions are not met the benefit is fully taxable.  The value of the taxable benefit will be, where the accommodation is obtained by the employer in terms of an arm’s length rental agreement, the lower of the actual cost incurred by the company, less any consideration paid by the employee, or the result of a remuneration based formula.
Reimbursement of costs to relocate emloyee and his/her family not taxable.  Relocation allowances not exempt from tax unless employee can provide documentary proof of expenses.
Specific expatriate concession No special tax concessions
Income of board members Depend on functions performed in the company
Tax returns The deadlines for submission of individual annual income tax returns for the 2018 tax year have not been issued by SARS. Deadlines published annually.  Filing season usually opens of the 1st of July and closes at the end of November for non provisional taxpayers and the end of January for provisional taxpayers.  Non-submission of an income tax return will attract an administrative non-compliance penalty.
Provisional tax returns:  first provisional tax return – six months after the particular year of assessmemt (last business day of August); second provisional tax return – on or before last day of the particular year of assessment (last business day of February)
Tax payments Annual return once asssessed the taxpayer is notified of any taxes outstanding or refund due. Tax is due by the date specified on the assessment, typically 30 days from the date on which the assessment is issued.
Provisional tax for an individual is due as follows:
• First payment – six months after the beginning of the particular year of assessment (last business day of August)
• Second payment – on or before the last day of the year of assessment (last business day of February)
• A voluntary third or “top-up” payment – seven months after the end of the year of assessment
Tax on real estate property  Transfer Duty:  duty is paid by the purchaser on the acquisition of immovable property and differentiates on the rate for individuals or entities. Natural persons:  progressive rates 0% – 13% depending on the value of the property.Value-Added Tax (VAT):   currently VAT in South Africa is charged at 15% (14% before 1 April 2018).  Buying property from a registered vendor is subjected to VAT.
Capital Gains Tax (CGT) is applicable when an asset is disposed of which arises in a loss or a gain. Residents and non-residents are liable to pay CGT on the disposal of immovable property or an interest an immovable property held as investment.  Certain indirect interests in immovable property such as shares in a property company are deemed to be immovable property.  The first ZAR 2million of any capital gain or loss on the disposal of a “primary residence” is disregarded.
Withholding tax is levied on the disposal by a non-resident of any immovable property in South Africa as an advance payment of tax on the seller’s actual account of normal tax liability. The amount to be withheld:
• 7.5% where the seller is a natural person;
• 10% where the seller is a company; and
• 15% where the seller is a trust
Estate duty is levied on property of residents and South African property of non-residents less allowable deductions. The duty is levied on the dutiable value of an estate at a rate of 20% on the first R30 million and at a rate of 25% above R30 million. A basic deduction of R3.5 million is allowed in the determination of an estate’s liability for estate duty as well as deductions for liabilities, bequests to public benefit organisations and property accruing to surviving spouses.
TAX TREATIES
Employment income / income from board members Most of Aouth Africa’s tax treaties based on OECD Model
INTERNATIONAL SOCIAL SECURITY
Cross border employments No social security system
UNEMPLOYMENT INSURANCE FUND
Unemployment Insurance Fund (UIF) The UIF gives short-term relief to workers when they become unemployed or are unable to work because of maternity, adoption leave, or illness. It also provides relief to the dependants of a deceased contributor. The employer must pay a total contribution of 2% (1% contributed by the employee and 1% contributed by the employer). The 2% contribution does not apply to so much of the remuneration paid or payable by the employer to the employee as exceeds ZAR 14,872 per month or ZAR178,464 per annum.
SKILLS DEVELOPMENT LEVIES
Skills Development Levies (SDL) SDL is a levy imposed to encourage learning and development in South Africa.  Subject to certain exemptions, employers are liable to pay 1% of the total amount of remuneration paid to employees after allowable deductions.
SDL is a levy imposed to encourage learning and development in South Africa.  Subject to certain exemptions, employers are liable to pay 1% of the total amount of remuneration paid to employees after allowable deductions.
IMMIGRATION
Work permit All foreign persons require a Work Permit should they wish to work in South Africa. The Work Permits are divided into 2 categories. Firstly Short Term Work Permits which are for a working period of 3 months or less. Secondly Long Term Work Permits which may be applicable for up to 5 years. Applicants must comply with specific criteria provided by the Department of Home Affairs, and applications must be submitted at the South African Embassy in the applicants country of residence.
Visa Visa requirements are regulated by 3 categories dependant upon the person’s country of citizenship:
1. Citizens of countries listed in Category 1 are not required to apply for a visa and will be issued with a visa for up to 3 months at the port of entry. All EU countries fall into this category with the exception of Hungary and Poland.
2. Citizens of countries listed in Category 2 are not required to apply for a visa and will be issued with a visa of up to 30 days at the port of entry. Hungary and Poland fall into this category.
3. Citizens of countries that do not fall into the above 2 categories must apply for a visa at the South African Embassy in their country of residence or origin.
Residency permits / registration certificate All foreign persons will have to apply for Residency permits should they wish to reside on a permanent basis in South Africa. There are a number different categories which apply to Permanent Residence applications.
Driving license A driver’s license issued in any country other than South Africa is valid to drive within South Africa if the foreign driver’s license was issued on a date on which the holder thereof has not been permanently or ordinarily resident in South Africa.  A person is permanently resident in South Africa a citizen or has been granted a permanent residency permit.  A person is ordinarily resident in South Africa if he/she is in South Africa on an extended visit of more than three months on a contract of employment (not just visiting). The permanent residence requirement does not apply to a holder of a diplomatic permit or a treaty permit.
STOCK OPTION PLAN Specific tax treatment including gains on vesting in taxable remuneration.
ARTICLE 15 OF THE OECD MODEL
183 days
Notion of employer
Existence of a permanent establishment