Kindly confirm whether a taxpayer, normally resident in South Africa, should declare income earned from a foreign company during the 2019/2020 tax year or only from March 2020.
Important:
This answer is based on tax law year ending 28 February 2020.
Answer:
We don't know what income you refer to. As a shareholder the only 'income' that can accrue to the individual would be a foreign dividend. Paragraph (k) of the definition of gross income in section 1(1) of the Income Tax Act includes foreign dividends in gross income and section 10B(2) provides for an exemption. If the foreign company is a controlled foreign company, section 9D would apply. In both instances the foreign sourced income must be declared in the RSA return of income. It is unlikely that a double tax agreement will give a sole taxing right to the country of source.