Looking for an accountant

[geekrebel]

Hi folks, I'm looking for an accountant to help with some tax and small business setup questions.

Ideally someone with experience across Australia and South Africa, as I'm doing consulting to South African firms. I'd like to set things up so that I have an Australian firm (sole trader) invoice the South African entity and then issue pay slips here.

Specific questions at the moment:

1. Can a sole trader issue pay slips? Or do I need to set up a company?

2. My last consulting contract paid to my South African bank account (it was simply less of a mission than doing a transfer and I could use some of the funds for expenses in ZA). Would this affect where I pay taxes? Or do I simply pay taxes based on where I declare the income?

Any help will be greatly appreciated.

Henk Kleynhans

[Hugo2]

Good day Geek Rebel

I am a cross border tax accountant and I provide advisory services only, I do not implement or execute IE the added value to that of the two independent firms in either country.

I like your suggestion but here with the issues:

1. You have not yet formally emigrated, I assume as you mentioned your last consulting fee was paid into an SA bank account. If you formally emigrate you can be paid aborad or in SA;

2. The structure you suggest is simple and probably tax effective but seriously contravene SA exchange control - you created a loop which is seriously frowned upon. It would be legal and easy to apply for SARB approval (without formal emigration) to have your SA client pay you abroad, but that is their application to SARB and I can assist them.

3. Your tax will be determined with reference to the treaty and your visa / permit. Assuming you have a PR and no permanent like office (but it's not that simple you need to carefully read the treaty) in SA, you will pay tax in Australia and as of 1 Jan or 1 Marc 2015 you will face an up to 15% withholding tax in SA.

4. Place of signing or entering into a contract is not that critical but could impact. I suggest the treaty and the place of execution or effective management is the true issue.

Welcome to inbox me and I can link you to SA linked Oz accountants.I assume you still in Sydney?

Greetings

[geekrebel]

Many thanks Hugo! I'll send a pm.

What do you mean by "formally emigrated"? I've had AU PR since 2002 and moved here in August 2012.

I first worked for a local company, before starting in July this year with a ZA company and have recently been offered another retainer by a separate company, also based in ZA.

Regarding money paid to ZA bank account, Why would this be in contravention of exchange control act? (I found the easiest way to get money over here has been to simply withdraw at an ATM)

It's not ideal, as it means I don't get local payslips, which in turn affects my access to credit locally.

Thanks again for your response.

Henk

[Brad76]

A sole trader can't really issue payslips but you could prepare a statement of profit and loss reflecting your trade result for a particular period.

If you trade with Australian businesses you would need an ABN (Australian Business Number), further you would need to be mindful of the various statutory thresholds requiring registration ie $75,000 p/a for GST

As would be the case anywhere in the world depending on the size of your operation, whether you're in it for the long term etc etc a more formalised structure ie a company would make more sense from a risk mitigation point of view!

Hugo did mention the DTA which exists between the two countries and it would be advisable for you to familiarise yourself with the aspects of that agreement relevant to the nature of the income you generate where you are at risk of being liable to tax in both countries.

The income you have generated from the two contracts will be taxable in Australia and you should receive an offset for any SA tax payable either as result of still being classified tax resident / source rules (subject to the provisions of the DTA) etc.

Edited November 10, 2013 by Brad76