[imagesource: iStock]

Being paid in pounds or Euros or dollars and getting to spend them in South Africa is the dream.

Do your time, cash your cheques, and return home to splash the dosh like some kind of tourist living it up for the summer.

Except, as with most things that sound too good to be true, there’s always a catch and it comes in the form of the tax man.

Moneyweb reports that it’s just become far more difficult for South Africans who live and work abroad to convince SARS that they are non-residents for tax purposes.

While it is only fair that people should not pay tax in SA if they are not here and are not using local infrastructure and services offered by government, they have to prove that this is the case…

“We are privy to a large number of SARS verification requests, allowing us to gauge the extent of a SARS audit and SARS’ ability to investigate and verify a taxpayer. We have seen a recent rise in these expatriate audits from SARS, and many different iterations thereof,” [Nikolas Skafidas, a tax diagnostic specialist] says.

Taxpayers have to prove this through the submission of a long list of documents at the request of SARS.

There was also a simple yet crucial change to tax returns for the 2022 year, with SARS deactivating the non-resident ‘tick-box’ on tax returns.

Because of this, you would need to first apply to be granted non-resident status before you could file your tax returns.

It sounds like a headache and you’d be entirely correct. You’d be well-advised to consider enlisting the help of tax professionals like Galbraith | Rushby to guide you through the process.

In addition, given the toughening stance of the revenue service, South Africans working abroad should likely expect an audit.

“In contrast to a verification, a SARS audit looks more closely at the taxpayer’s financial and accounting records and/or supporting documentation to verify if the taxpayer’s tax position has been accurately stated to SARS.

“This is usually a much more invasive process than a verification by SARS,” says Skafidas.

There are two tests SARS uses to determine whether a taxpayer is a resident in South Africa, one of which has three components related to how long one spends in South Africa during a one-year and five-year period.

The simplest way to explain it is to say you should not try and navigate these waters alone.

Pay the pros, take that hassle off your plate, and you might actually get to enjoy spending your wads of foreign cash on home soil without SARS breathing down your neck.

[source:moneyweb]