A taxpayer has in the past earned foreign employment income that was exempt from income tax by section 10(1)(o)(ii). Because of the Covid-19 lockdown, this year the taxpayer was not able to perform his work outside of South Africa but essentially performed the same work while being in South Africa. Is the income now subject to normal tax or does SARS still allow the exemption?
Important:
This answer is based on tax law year ending 28 February 2021.
Answer:
We agree with your view - the section 10(1)(o)(ii) exemption is not available if the services were rendered in the RSA (and the person was not physically absent for the required number of days during the relevant 12 month period).