Non-Resident South Africans Will Miss Out On Tax Amnesty

by Robert Lee, Tax-News.com, London

07 May 2003

South African taxpayers working abroad and no longer filing tax returns in their home country may not be entitled to take part in the SARS (South African Revenue Service) Exchange Control Amnesty, some tax experts have warned.

According to Geoff Kroon, a tax partner at Deloitte and Touche, the legislation contained in the Exchange Control Bill and the Amendment of Taxation Laws Bill only applies to individuals who are ordinarily resident in South Africa. Although those who work for foreign corporations overseas remain South African residents for income tax purposes, they are not required to file a tax return at home, and this could prevent them for applying for amnesty protection, according to Kroon.

"Such a person would still be a resident for income-tax purposes but would have extreme difficulty in applying for the tax amnesty," Kroon told the Business Day news service.

South Africans working abroad on contracts with foreign companies will also fall foul of this law, according to Charles de Wet, a tax partner at PricewaterhouseCoopers. Individuals who are out of the country for more than 330 days in a one year period will be classified as non-resident from the date they left South Africa. Therefore, de Wet says, they will be unable to participate in the tax amnesty. He also warned that South Africans returning from overseas will miss out as a result of the residency rules.

The date of the amnesty has recently been put back one month. It will now take place from June 1 to November 31 this year. It has also been extended to close corporations and trusts.

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