close
Share with your friends

Foreign Remuneration Exemption – Tax directives and the way forward

Foreign Remuneration Exemption

With all the talk and buzz around the changes to the Foreign Remuneration Exemption (Section 10(1)(o)(ii)), a lot of uncertainty and questions were raised as to how this will be implemented practically.

1000

Also on home.kpmg

With all the talk and buzz around the changes to the Foreign Remuneration Exemption (Section 10(1)(o)(ii)), a lot of uncertainty and questions were raised as to how this will be implemented practically.

SARS have now issued an updated Interpretation Note 16 (IN) on the Foreign Remuneration Exemption which includes guidance on how the Foreign Tax Credits (“FTC”) may be claimed via payroll.

With the change in legislation, more employees will find themselves in a situation whereby they are subject to tax on the same income in South Africa (“SA”) and the foreign country. This may place employees in a difficult cash flow position, as tax is potentially first payable in both countries and needs to be claimed back in one of them. The IN discusses methods that may be applied to alleviate these hardships.

A double tax situation arises where the employee does not qualify for the S 10(1)(o)(ii) exemption or qualifies for the exemption, but earns taxable remuneration that exceeds the R1 million exemption. This can cause hardship for the employee on South African payroll, who is required to pay tax in the foreign country, and has employees’ tax withheld in South Africa. 

 

Click here to read the full article

© 2020 KPMG Services (Pty) Limited, a South Africa private company and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved.

KPMG International Cooperative (“KPMG International”) is a Swiss entity.  Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. 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.

Connect with us

 

Want to do business with KPMG?

 

loading image Request for proposal