FROM March 1, 2020, expats working and living abroad would be liable for what is now known as “expat tax.” The move is seen as a way to compensate for the brain drain taking their taxable incomes with them.
New amendments to the Income Tax Act would 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.
The exemption currently applies to South African tax residents who provide services outside South Africa on behalf of an employer for longer than 183 days during a 12 month period. It is only applicable if during the same 12 month period a person rendered services outside South Africa for a continuous period of at least 60 days.
It is important for expatriates to understand that the exemption only applies to South African tax residents working abroad. Expatriates who had been living abroad for many years or who had emigrated are unlikely to be effected by this law. They will only pay tax in the country where they now live and are employed.
Source: Business Insider