Where do I pay tax when I earn off­shore in­come?

CityPress - - Business -

Muham­mad writes:

I have a job and am regis­tered for tax in South Africa but I have regis­tered as a free­lancer on var­i­ous in­ter­na­tional sites like Up­work. How would pay­ments for work done through th­ese sites be taxed? Pay­ment would be re­ceived by PayPal.

City Press replies:

Any in­come you earn, ir­re­spec­tive of where it is sourced, should be de­clared in your South African tax re­turn if you are a res­i­dent in South Africa. PayPal falls un­der ex­change con­trol reg­u­la­tion and you need to switch to rands within 30 days – you can­not keep for­eign cur­rency in your PayPal ac­count for longer than that.

If you work in a for­eign coun­try for more than 183 days per an­num and earn an in­come from em­ploy­ment over­seas dur­ing this pe­riod, that in­come would be ex­empt from tax in South Africa.

Keep in mind, how­ever, that a pro­posal has been put for­ward by Na­tional Trea­sury that the cur­rent ex­emp­tion may be amended, un­less you pay tax on your in­come in that coun­try. It is pos­si­ble that all South African tax res­i­dents, even if out­side the coun­try from 183 days or more, will pay tax in South Africa and re­ceive a re­bate on any tax paid in another coun­try. This will neg­a­tively af­fect those South Africans work­ing in a low-tax or tax-free ju­ris­dic­tion. This amend­ment is, how­ever, yet to be passed.

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