Remember that expat tax that the National Treasury and SARS have been proposing since 2017?

Yeah, the one where South African tax residents abroad will be required to pay tax, to SARS, of up to 45% of their foreign employment income, where it exceeds the R1 million mark.

Well, they got their way, it’s happening, and will be in full effect by March 2020, with the National Treasury “categorically confirming” that the amendment will be introduced.

That means you have a year to get in line, which brings us to the consequences.

According to BusinessTech, the impact of the amendment to the tax law on the economy and workforce could be devastating to the workforce and economy:

The reality is that with this amendment, any additional cost would ultimately have to be borne by the employer, as no expat would accept an assignment without these benefits and, to ensure that these assignments remain lucrative, the employer would have to increase the expat’s package…

…payroll personnel, SA expats and in fact SARS officials are in for many growing pains and an overall torrid time when the amendment kicks in…

One attendee mentioned a very irate client of his who did financial emigration to Malta, believing financial emigration will completely absolve him from South African tax – where in reality Financial Emigration was clearly not the correct approach to follow based on his specific set of facts…

SARS plans on setting up a dedicated head office function that would deal with matters pertaining to expat tax.

That said, neither the National Treasury or SARS have any answers right now that will alleviate the fears of stakeholders.

In other words, your best bet for navigating the new tax law is to get in the help of a professional, like one of the experts at Galbraith | Rushby, who offer professional tax compliance and advisory services to individuals and businesses.

Things could get dicey in March next year, and it might be best to get ahead of the game.

Also, with all the confusion out there, you don’t want to take the risk of running this one alone.

[source:businesstech]