My husband does work for a company that is based in Colombia. The company does research work on climate change and is registered as a Non Profit in Colombia. The money earned by the company comes from donors and bursaries. At this point he is paid the gro
Important:
This answer is based on tax law for the year ending 28 February 2020.
Answer:
I don’t think there is an exemption that applies here (in the RSA that is). Columbia is not a treaty country, so the relief must be sought in our Income Tax Act only.
There are two possibilities:
Because the services are rendered in the RSA, section 10(1)(c) is applicable it provides an exemption in respect of salary and emoluments, (in this instance probably items (iv) – (vi)) of the Income Tax Act. It generally then applies to “any salary and emoluments payable to any subject of a foreign state” who is either temporarily employed in the RSA or not ordinarily resident in the RSA. The other requirement is that “the exemption of such salary and emoluments is authorized by an agreement entered into by the governments of such foreign state” or the relevant institution and the RSA. You’ll see that this would not be available.
Certain officials of the United Nations are exempt from taxation on their salaries.
Section 18, under Article V, states that “Officials of the United Nations shall … be exempt from taxation on the salaries and emoluments paid to them by the United Nations”.
This is a bit of a grey area, but this agreement is meant to apply in lieu of our Act. I understand that employees, in similar instances, obtain a letter from the employer to confirm that the exemption applies. One would then treat the income as such (exempt), and if queried by SARS, provide them with the letter from the UN. Or obtain a ruling from SARS. But I don’t think it applies in your case either.
If tax is withheld at source, or he is taxed in Columbia, he will get the section 6quat rebate – because the source is in the RSA he will opt for the deduction.