Sars Dta Agreements

The above navigation area can be used to access the texts of the corresponding agreements. Double taxation conventions („DBAs“) are internationally agreed legislation between South Africa and another country. South Africa has dozens of such agreements with different countries and the main objective of a DBA is to ensure that any country subject to the agreement knows what its tax rights are to taxpayers. „Most of Africa is covered by double taxation conventions. However, if one couple lives in South Africa and one spouse works mainly outside the country in Africa and the other works in South Africa, it is very likely that they are both considered SA tax residents,“ he explains. The agreements between the two tax administrations in two countries are intended to allow administrations to eliminate double taxation. If you have a dual passport, you must prove that you live in another place. SHIFTING THE GOALPOSTS FOR SOUTH AFRICANS ABROAD LEGISLATIVE CHANGES TO RETIREMENT WITHDRAWALS „People living abroad, who have not said they have left the country and who may still have an active tax number, are definitely at risk. A lot of people don`t make sure their tax identification number is no longer active,“ he says. The amendments to South Africa`s tax law, which will come into force on March 1, 2020, essentially mean that SA tax payers working abroad will only be exempt from tax for the R1 million they earn abroad. Then they have to pay taxes on their foreign income. He warns that if he addresses a problem and suspects tax evasion, he can levy a 200% tax.

„Most tax authorities talk to each other. There are more than 140 banks around the world reporting SARS transactions. SARS knows all these cash flows. SARS will punish tax evaders with administrative penalties,“ he warns. There are two structures for penalties – fixed percentages and per incident of problems. Fixed percentages range from 20% to 200%. These include, for example, people who work in Africa under contract but still have their homes, families and tax residences in South Africa. According to Louw, they can only change their tax residence if they also relocate their family from SA. One of the factors to watch out for is whether there is a double taxation agreement (DBA) between South Africa and the country in which you work, he says. FIVE MISCONCEPTIONS ABOUT DOUBLE TAX AGREEMENT RELIEF Louw warns that some people living permanently abroad may need a South African tax number. For a full status of all DBAs and protocols, whether they are still under negotiation, they have already been signed but have not been ratified in any of the Member States or are in force, we insert below a status review document. „If a taxpayer is registered as a tax resident in both countries and there is a DBA, the DBA determines where and how a taxpayer should pay taxes on the income collected,“ says Louw.