My client is a SA resident and lived in SA until 2 March 18 at which stage she moved to the USA to assist her fiance who was enrolled in a health trail for 5 years. She will live in the USA for the duration of the 5 years, but plan to return to SA. For th
Important:
This answer is based on tax law for the tax year ending 28 February 2020.
Answer:
We agree with your view. The individual, in this instance, didn’t emigrate and intends to return to the RSA. She is therefore ordinarily resident in the RSA – see paragraph (a)(i) of the definition of “resident” in section 1(1) of the Income Tax Act.
This will be so until she becomes a person who is liable to tax in the USA by reason of her domicile or residence (green card) – see Article 4 of the treaty.
The USA will tax remuneration derived by a resident of the RSA in respect of an employment exercised in the USA. Relief for the double tax that arises is provided, for the 2019 and 2020 years of assessments, in terms of section 10(1)(o)(ii) of our Act. The 183, not 189 as you indicated, and 60 continuous full days absence.