Expat tax kicks in soon – Those affected need to heed implications

South African’s living and working abroad are preparing themselves for the new amendments to the Income Tax Act, which have been dubbed the expat tax, to come into effect from 1 March 2020.

The National Treasury and the South African Revenue Service (SARS) announced major changes in the tax exemption on South African expatriates in 2017, but the amended legislation only takes effect from 1 March 2020. The amendments mean that South African tax residents working abroad will only be exempt from paying tax on the first R1 million they earn abroad. Thereafter they will be required to pay tax on any foreign earnings.

According to a BusinessTech article, those who do not comply with the new requirements will face stiff penalties and risk up to two years in prison. “There are still many expatriates out there with their head in the sand regarding the change in legislation and therefore, failing to make proper arrangements to ensure that they are compliant and following proper procedure,” Claudia Aires Apicella, head of financial emigration at Tax Consulting shares.

“It is imperative that South African expatriates get themselves acquainted with the law and how it will affect them and avoid being fish bait to the many dodgy investment and aggressive tax schemes being punted at them,” Apicella warns.

Click here to read the BusinessTech article.

Click here to read a Moonstone article about the 7 things you need to know.

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