Foreign workers are now provided with an option to apply to Sars for tax exemption.
Following the backlash from the tax fraternity in response to the controversial Immigration Regulations, which were published on 8 February this year, the Minister of Home Affairs Aaron Motsoaledi wasted no time in amending and republishing new Immigration Regulations on 20 May.
“work conducted, as contemplated in Section 11 of the Act, for a foreign employer or derives foreign source income on a remote basis: Provided that — if the visa is issued for a period not exceeding six months within a 36-month period, the foreigner may apply to be exempted by the South Africa Revenue Service from registering as a taxpayer;
In the absence of an existing tax exemption, it remains concerning that the Department of Home Affairs continues in its habit of trying to make tax law despite challenges raised to the initial regulations. Alternatively, can we expect National Treasury or Sars to confirm the introduction and implementation of this new exemption?
Conversely, foreign remote workers who exceed their six-month stay in South Africa are obliged, by virtue of the regulations, to register as taxpayers with Sars. This is, again, contrary to the current tax framework, whereby the Commissioner for Sars issues a Public Notice determining the tax obligations for individuals and companies each year.
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