A taxpayer has a registered business in the United Arab Emirates (he resides in South Africa). If he takes income from the business, not taxable according to their laws, and brings it to South Africa, will he be taxed on the income here?
Important:
This answer is based on tax law year ending 28 February 2021.
Answer:
You need more information before you can advise the taxpayer. You need to confirm what the nature of the enterprise in the United Arab Emirates (or the “registered business” as you said). This is because the term “business” includes the performance of professional services and of other activities of an independent character – see Article 3. For purposes of the guidance that follows we accept that the enterprise is a company and that its place of management is in the United Arab Emirates. Also that it doesn’t carry on business in the RSA through a permanent establishment, and that the company is not a controlled foreign company. The ‘taking of income’ can either be by way of a salary or a dividend. Both would be gross income for the RSA resident (we assumed the taxpayer is resident in the RSA) and some exemptions may be available.