South Africa: Proposal to revise foreign-earnings exemption for individuals working abroad

South Africa: Foreign-earnings exemption

There are proposals to relax the requirements for days spent outside South Africa—from 183 days to 117 days—for individuals who could not travel to work outside South Africa, during the period from 1 March 2020 to 28 February 2021.

1000

Related content

The relief would be a response to the coronavirus (COVID-19) pandemic.

Under current law, remuneration earned for services rendered by a South African tax resident is exempt if the individual was working offshore for more than 183 days during any period of 12 months starting or ending in the tax year concerned and for a continuous period of more than 60 days during that 12-month period. As of 1 March 2020, the exemption applies up to a maximum amount of R1.25 million per year.

Under the proposal, the 66 days (from 27 March 2020 to 31 May 2020, when South Africa operated under COVID-19 alert levels 5 and 4) would be subtracted from the 183-day threshold used to determine the eligibility for exemption of foreign-services remuneration. Therefore, the number of days that a person spent working outside South Africa would be reduced to more than 117 days in any 12-month period, for years of assessment ending from 29 February 2020 to 28 February 2021. The current requirement that more than 60 of the days abroad must be a continuous period would remain unchanged.

Read an October 2020 report [PDF 365 KB] prepared by the KPMG member firm in South Africa

The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

Connect with us

 

Want to do business with KPMG?

 

loading image Request for proposal