An individual, a South African resident, worked for a Zambian company for 4 months. She invoiced the company for her salary (services rendered) and these amounts, without any deductions, were paid into an SA bank account. For the remaining 8 months of the
Important:
This answer is based on tax law for the tax year ending 28 February 2020.
Answer:
As a resident of South Africa, the foreign source income will be gross income (as defined in section 1(1) of the Income Tax Act) and must be declared in the return of income.
We accept that paragraph 1 of Article IX applied (copied below), and no tax was withheld in Zambia.
Extract from the Article:
1. An individual who is a resident of the Union shall be exempt from Federal tax on profits or remuneration in respect of personal (including professional) services performed within the Federation in any year of assessment if –
(a) he is present within the Federation for a period or periods not exceeding in the aggregate 183 days during that year; and
(b) the services are performed for or on behalf of a person resident in the Union; and
(c) the profits or remuneration are subject to Union tax.
The “‘Did you receive remuneration for foreign services rendered’ (Select ‘Y’ or ‘N’)” question must be answered when the return is requested. If yes is selected, it will be required to complete the following sections on the return:
o ‘Residency Information’
o ‘Amounts considered non-taxable’
o ‘Other Deductions’.