My Client was a tax resident up until 2007. He emigrated and started declaring is income in Switzerland and decided to come back in 2017 and started declaring his income in South Africa again. He received Dividends and paid withholding tax on Dividends
Important:
This answer is based on tax law for the tax year ending 28 February 2020.
Answer:
It is absolutely important to determine the exact moment of when the person became a resident, for tax purposes, of the RSA. We suspect it would be the day the person became ‘ordinarily resident’ in the RSA – see the definition of resident in section 1(1) of the RSA Income Tax Act and Article 4(1) of the RSA / Switzerland treaty.
There will be no relief, or no double tax (so to speak), in respect of dividends (foreign dividends) paid by companies’ resident outside the RSA to a person resident in a country other than the RSA. It is outside the scope of the service provided by us to provide guidance on foreign tax legislation – in this instance England and Switzerland and the relevant treaty between the two countries.
There is no obligation on the person to declare dividends, foreign dividends, in the RSA if the person is not a resident of the RSA. The amounts refunded by the foreign revenue authority will equally not be income and needn’t be declared in an RSA ITR12.