When you are a resident and need to pay tax in South Africa on your worldwide income

Resident definition explained

Because of the SVDP (Special Voluntary Disclosure Program) that closes on the 31st of August 2017, a lot of people have been asking us if they are required to do the SVDP if they live abroad.

My first question to them is: “Are you a SA resident taxpayer that needs to pay tax on worldwide income?”

There is no formal definition in the act for “non-resident”, but “taxpayer” and “resident” are defined in the act.

“The term “resident” refers to any:

- Natural person 

- Who is ordinarily resident in South Africa; or

- Who is not at any time during the relevant year of assessment ordinarily resident in South Africa but was physically present in the Republic in that year and complied with all three of the requirements of the physical presence; or

- Person (other than a natural person) which is incorporated, established or formed in South Africa or which has its place of effective management in South Africa, but does not include any person who is deemed to be exclusively a resident of another country for purposes of the application of any agreement entered into between the government of South Africa and that of the other country for the avoidance of double taxation. “***

This means that a non-resident is any person that does not comply with the definition of a resident above.

The SARS website does refer to “taxpayers” if you read on the SVDP section, but this is to ensure that “taxpayers” consider if they need to apply for the SVDP.

So, if you are a non-resident, you only need to include SA source income in your tax return and not worldwide income.

If you have any questions, please do not hesitate to contact us on 0116581324 or contactus@anlofin.com

*** http://www.sars.gov.za/AllDocs/OpsDocs/Guides/LAPD-IT-G13%20-%20Tax%20Brochure%20for%20Non%20Residents%20-%20External%20Guide.pdf