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  • Elimination of Double Non-taxation of Foreign Employment Income Proposed
Articles:

Elimination of Double Non-taxation of Foreign Employment Income Proposed

22 February 2017

By: Esther van Schalkwyk, Consulting Tax Manager, BDO SA

The Minister of Finance indicated in his annual Budget Speech delivered on 22 February 2017 that double non-taxation of foreign employment income should be eliminated. Under the current dispensation, remuneration earned by South African residents for services performed outside South Africa is exempt from South African income tax if that person was outside South Africa for more than 183 full days in aggregate during any 12-month period, provided certain other requirements are met. The Budget highlighted that the exemption as it currently reads may result in double non-taxation if the foreign employment income is not subject to tax payable in the foreign country. The proposal is that the foreign employment income exemption should only apply to foreign employment income that is subject to tax in the foreign country.

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