Client worked for 9 months in China for Chinese company with no links in SA. Paid in used and was 4 months at a time offshore. Section S10 (1) (0) (11) income or not. Tax was held back by the Chinese Company - Where to declare and file it . He was retired
Important:
This answer is based on tax law for the tax year ending 28 February 2020.
Answer:
It is irrelevant that the resident of China has no links with the RSA. The currency of payment is also irrelevant. Because a resident of the RSA worked in China, we accept the time offshore was spent in China, the treaty between the two countries will apply.
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.