close menu

South Africans working abroad: Protect your earnings from proposed SARS tax rules

by Niel Pretorius | Mar 27, 2017
  • If you are a South African tax resident working abroad in a country that does not tax you on domestic earnings, like the UAE and many other middle eastern states, you need to be aware that SARS is planning to tax you on those earnings. There are ways you can avoid paying South African tax on your foreign earnings and I strongly advise that you take a long hard look at your options before it’s too late.
    Skyline of Dubai with images of sunset

    The February Budget Speech made some far-reaching changes to how South Africans abroad will be taxed. The main exemption is the 183/60 day exemption found in section 10(1)(o)(ii) of the Income Tax Act (ITA).

    What’s the impact of these new provisions?

    Section 10 of the ITA exempts income for services rendered outside South Africa for periods exceeding 183 days in a 12-month period, of which at least 60 must be consecutive. This relates only to employment income and not other types of income such as rent, interest or investment income. It is also not available to self-employed persons or sub-contractors.

    The historic position was that any employment income received or accrued during such absence from South Africa would be exempt from taxation in South Africa.

    In terms of the residence-based system of taxation, South African residents are taxed on their worldwide income. However, the government, in the 2017-2018 budget, stated that this exemption on foreign employment income appears excessively generous.

    If a resident works in a foreign country for more than 183 days with no tax payable in the foreign country, that foreign employment income will benefit from double non-taxation. It is proposed that this exemption be adjusted so that foreign employment income will only be exempt from tax if it is subject to tax in the foreign country.

    SARS issued an Interpretation Note on 2 February 2017 on how such income is to be dealt with. In terms of this note, a number of South Africans working abroad may now find themselves subject to additional taxation.

    What about your historical earnings?

    If you complied with the existing legislation, you will not have any issues with SARS.

    You should have filed your annual tax returns and declared your foreign exempt income. If you haven’t, this would need to be rectified.

    Determine whether these new provisions will apply to you

    The first port of call would be to determine your residency for South African tax purposes. This will give you certainty in terms of your position and your available options.

    Whilst you may be outside South Africa for more than 183 days, even for a few years, you may still be regarded as being ordinarily resident in South Africa.

    If your intention is to remain abroad, you may wish to consider formal emigration as opposed to a mere relocation.

    How Sable International can help you

    We can give you access to comprehensive advice on various aspects, including your residency status, financial emigration, investment structuring and other advisory services.

    Our financial emigration and wealth teams can assist you in finalising your affairs with SARS, changing your resident status with SARB and structuring your investments in tax-efficient vehicles and investments, considering your current and intended future countries of residence.

    If you choose to return to South Africa permanently at some point, we can assist in having your affairs structured in the most tax-efficient manner.

    If you’re concerned about the new tax provision being put into force give our team a call on +44 (0) 20 7759 7519 (UK) or +27 21 657 1578 (SA). Alternatively, you can send our wealth team an email on Once we’ve had a chat we’ll be able to give you the advice you need to minimise your tax exposure and maximise your wealth.

    We are a professional services company that specialises in cross-border financial and immigration advice and solutions.

    Our teams in the UK, South Africa and Australia can ensure that when you decide to move overseas, invest offshore or expand your business internationally, you’ll do so with the backing of experienced local experts.

    • Hand depositing coin depicting Pound symbol into house-shaped piggy bank
      Should you remortgage or consider a product transfer?
      Sep 23, 2019  |  by Neil Ambrose
    • Town- houses
      How Shari’ah (Islamic) mortgages work
      Sep 06, 2019  |  by Ian Henning
    • Home Model
      4 things first-time homebuyers should do
      Aug 20, 2019  |  by Neil Ambrose
    • Property with price tage
      It’s a great time to buy your first UK property – here’s why
      Jun 03, 2019  |  by Marlon Borez
    • Handing over house keys
      Contractor mortgages: What you need to know for a successful application
      May 31, 2019  |  by Ian Henning
    • House rent protection
      Rental guarantees: What lenders think about rent protection schemes
      Apr 24, 2019  |  by Bill Monty
    • blended-families
      How “yours, mine and ours” complicates the estate planning process: Advice for blended families
      Apr 17, 2019  |  by Sherron Alexander-Bedingfield
    • Mortgage Concept
      The perfect time to secure a better interest rate on your remortgage
      Apr 03, 2019  |  by Ian Henning
    • growing tree
      The boom behind ESG investing – what’s actually driving the demand
      Mar 26, 2019  |  by Mike Abbott
    • Lightbulb working
      South Africa’s Retail Distribution Review – slow but important changes for investors and advisors
      Mar 05, 2019  |  by Mike Abbott

    South Africa

    Cape Town

    Regent Square
    Doncaster Road
    Kenilworth 7708 +27 (0) 21 657 2120


    25 Richefond Circle
    Umhlanga 4320 +27 (0) 31 536 8843

    United Kingdom


    One Croydon
    12-16 Addiscombe Road
    Croydon CR0 0XT +44 (0) 20 7759 7514



    9 Yarra Street
    South Yarra
    VIC 3141 +613 (0) 8651 4500

    Sable International is a trading name of 1st Contact Money Limited (company number 07070528), registered in England and Wales. We are authorised and regulated by the Financial Conduct Authority in the UK (FCA no. 517570), the Financial Services Conduct Authority in South Africa (1st Contact Money [PTY] Ltd - FSP no. 41900) and hold an Australian Financial Services Licence issued by ASIC to deal in foreign exchange (1st Contact Group - AFS Licence number 335 126).

    We use cookies to provide the best website experience for you. Using this website means that you agree to this. How we use cookies.