Where do I pay tax when I earn offshore income?
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.