Tax payer working in Mali from 3 January 2016 for a period of 2 years. Tax payer will be out of the country for more than 183 days and 60 days continues. will he qualify for tax exemption on the Mali income received in Jan and Feb 2016. Facts - tax payer
Important:
This answer is based on tax law for the year ending 28 February 2016.
Answer:
Section 10(1)(o)(ii) of the Income Tax Act (see also Interpretation Note No. 16) is very clear - the period of 183 days and the continuous period of 60 days must fall within the 12 month period commencing (or ending) in the year of assessment.
The current practice generally prevailing is that the 12-month period referred to is not aligned to the South African tax year, but must include consecutive calendar months. At least one calendar month must fall within the tax year during which the exemption is sought.
The only implication, if the period spans multiple years of assessment, will be that “the remuneration is deemed to have accrued evenly over the period that those services were rendered” – see proviso (C) of section 10(1)(o)(ii).