Foreign Income On Sars Tax Return

[Johan du Toit]

Hi,

When we emigrated here in May 2010, we just transferred all our money and left. We did not emigrate officially. I have just completed my SARS Tax return.

Do I need to declare my Aussie income?

What if I did not? Surely I do not have to pay tax in SA on my Aussie income?

[Emille]

Johan I would not declare your Aus income - dont...

I think if you are outside of SA for 180 days (or something) then you dont have to pay on your foreign income - but still on your sa income

E

[Johan du Toit]

Johan I would not declare your Aus income - dont...

I think if you are outside of SA for 180 days (or something) then you dont have to pay on your foreign income - but still on your sa income

E

They paid my refund into my wife's SA account. No questions asked. I provided my Aus address on the tax return, but did not declare my Aus income.

The next question:

Do I now have to fill in the tax SARS tax return every year? Take note I will never earn in SA again.

I do want to get dual citizenship at some stage.

[Emille]

Johan

I lived in the UK some years ago and I really looked into the issue - as my worse fear was that I had to pay SA tax on my UK salary etc. I cannot remember exactly but I do remember after a number of days (183 or somethign) you dont have to pay on your foreign salary any tax. I still got correspondence back from SARS about it but I dont have that anymore.

Your second question:

If you dont have any SA income like rental or pension or anything like, that, then no you dont have to. Just make sure that you 'close' everything off in terms of tax for the income you have earned in south africa - in other words complete the tax return for the last year that you have earned income there or the portion of the year you have earned income there - bearing in mind you have to earn more than the 'minimum' for that year (under which one doesnt pay tax). I dont know if you should complete on last one as '0' just to indicate you have not earned anything - perhaps somebody can give advice on that (you dont want to end up getting fines for the next year for 'not submitting returns')

All the best,

E

Edited August 4, 2011 by Emille

[JDJoburg]

Hi

If you moved to Aus in May 2010 with the intention of staying here permanently, then you will be considered to be an Australian tax resident and would have ceased to be a South African tax resident as from the the date of your departure - note that "resident" in the context of income tax has, strictly speaking, nothing to do with the type of visa that was issued to you and whether or not you followed the "formal emigration" process in South Africa.

So if you moved to Aus with the intention of staying here permanently (and with no intention of going back to SA in the foreseeable future), then you should be considered to be an Australian tax resident, as contemplated in the tax treaty between SA and Aus. This means that the number of days spent in SA or Aus actually becomes irrelevant.

From the moment that your tax-residency changes from South African to Australian (i.e. from the date that you arrive in Aus), you will have to pay Australian tax on your worldwide income. So you won't have to pay SA tax on your Australian income. If you still have certain income coming from an SA source (such as interest) the taxation of this income will be determined by the tax treaty between the two countries - certain amounts may be taxed in SA even though you are not an SA tax resident any more.

You should still complete a tax return for the tax year 2010 - 2011, since you were an SA tax resident from 1 March 2010 until your departure in May. You will have to inform SARS that you ceased to be an SA tax resident from the date of your departure (meaning that you won't pay tax in the Australian income earned since your departure) and that you wish to deregister as from 1 March 2011. (deregistering for tax should not affect citizenship, so I see no reason why you should remain registered as an SA taxpayer and keep submitting returns, unless you still have SA-sourced income.)

Go here for a copy of the tax treaty between SA and Australia: http://www.sars.gov.za/home.asp?pid=3919

Hope this helps.

Cheers

JD

Edited August 4, 2011 by JDJoburg

[Johan du Toit]

Hi

If you moved to Aus in May 2010 with the intention of staying here permanently, then you will be considered to be an Australian tax resident and would have ceased to be a South African tax resident as from the the date of your departure - note that "resident" in the context of income tax has, strictly speaking, nothing to do with the type of visa that was issued to you and whether or not you followed the "formal emigration" process in South Africa.

So if you moved to Aus with the intention of staying here permanently (and with no intention of going back to SA in the foreseeable future), then you should be considered to be an Australian tax resident, as contemplated in the tax treaty between SA and Aus. This means that the number of days spent in SA or Aus actually becomes irrelevant.

From the moment that your tax-residency changes from South African to Australian (i.e. from the date that you arrive in Aus), you will have to pay Australian tax on your worldwide income. So you won't have to pay SA tax on your Australian income. If you still have certain income coming from an SA source (such as interest) the taxation of this income will be determined by the tax treaty between the two countries - certain amounts may be taxed in SA even though you are not an SA tax resident any more.

You should still complete a tax return for the tax year 2010 - 2011, since you were an SA tax resident from 1 March 2010 until your departure in May. You will have to inform SARS that you ceased to be an SA tax resident from the date of your departure (meaning that you won't pay tax in the Australian income earned since your departure) and that you wish to deregister as from 1 March 2011. (deregistering for tax should not affect citizenship, so I see no reason why you should remain registered as an SA taxpayer and keep submitting returns, unless you still have SA-sourced income.)

Go here for a copy of the tax treaty between SA and Australia: http://www.sars.gov....me.asp?pid=3919

Hope this helps.

Cheers

JD

How do I deregister? Google was no help.

[JDJoburg]

Don't know, the SARS website is silent in this regard. Maybe just send them an email, their customer service is often not too shabby in my experience.

I don't think you will be able to deregister until your last return has been assessed though.

I can help with tax law, tax admin is another story...

How do I deregister? Google was no help.

[Johan du Toit]

Last return was assessed and tax refund was paid out. All done.

[Emille]

Hi JDjoburg

Do you perhaps have advice for me to my post here:

thanks

E

[JDJoburg]

See my reply as posted in that thread.

Hi JDjoburg

Do you perhaps have advice for me to my post here:

thanks

E

[MadMother]

Hi

We arrived in Australia on 22 January 2009 with temporary residence (457), we then got permanent residency (857) on 1 September 2009. I recently read about declaring your worldwide income to SARS and now I'm totally freaked out! Our 2008/2009 tax returns were submitted and assessed by SARS and I have submitted nil returns on e-filing since then - I declared that my husband and I hadn't earned any income, taking that to mean that we hadn't earned a salary in SA and didn't mention our Australian salaries. I am now scared that if I declare earnings for 2011/2012 that SARS is going to come after us for tax evasion!

We sold our house in SA, surrendered our policies, paid up our retirement annuities and took our money over to Australia with our travel allowance. I've closed my South African bank account, but my husband's is still open. The only 'income' from South Africa my husband is earning is a few cents interest on his bank account and Old Mutual dividends of around R100 per year (which are tax free anyway).

If I declare our Australian earnings - do I fill it in at the section for 'Amounts accrued to you as an exclusive deemed resident o another country in terms of a double taxation agreement between RSA and that country'? I found a table on the SARS website for averaged exchange rate to use to convert dollars to rands.

What about interest earned on our Australian savings account? Must I included that in the double taxation amount or as foreign interest?

Another question I have is as to our residency status - we haven't officially emigrated, but then we don't have any assets left in SA either and do not intend to return. I am looking into formally emigrating, but this will be a process in itself as I am not sure how to fill in form 336b considering we left SA more than 3 years ago. I am just desperate to get rid of SARS, I can't see myself e-filing returns annually until I die. I sent them a letter in 2010 requesting to be deregistered as a tax payer, but they wrote back requesting form 336b to get us tax clearance.

Any advice would be immensely appreciated!

[RichardH]

Last return was assessed and tax refund was paid out. All done.

Hi Johan

So did you manage to de-register with SARS?

Thanks

Richard