My client is working in China, he is taxed in China. Is he going to be taxed in SA as well? The contract or work has no ties to SA. He is teaching there. He sends a portion of his salary to SA. He is there since Nov 2017. Will he be taxed on his earnings
Important:
This answer is based on tax law for the tax year ending 28 February 2020.
Answer:
You need more information before you can give the client the appropriate advice. For purposes of the guidance that follows, we will assume that the client is a (tax) resident of the RSA.
According to article 15 of the agreement between the RSA and the Government of the People’s Republic of China, both countries have a right to tax the income. The RSA gives relief for the double tax by providing for an exemption. To qualify for this exemption (section 10(1)(o)(ii) of the Income Tax Act), the individual (the resident of the RSA) concerned must have been outside the RSA for more than 183 full days in a 12-month period with one period of continuous absence of more than 60 full days. So, if the person doesn’t meet the requirement and the exemption doesn’t apply, the individual will then rely on the section 6quat rebate in respect of the tax paid in China.
You may want to consult SARS’s interpretation 16 for further information about it.