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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.


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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

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