Generic selectors
Exact matches only
Search in title
Search in content
Post Type Selectors
Search Products
Filter by Categories
Company Secretarial
General Business
General Interest
Investing in Property
Personal Growth
Personal Wealth
Trusts and Estate Planning

I can understand why this causes confusion. So let’s go through the entire story.

All South African residents are taxed on their worldwide earnings. This is know as the residence based tax.

Non-residents are taxed on earnings which come from a South African source. This is known as the source based tax.

So, to test whether or not you are a resident of South Africa, there’s a step by step process. –

  • Are you ordinarily resident in South Africa?
    • Is this essentially your home? Various tests will be applied. Typically, it is your home if
      • it is the place to which you will return after your wanderings
      • you have a residence here
      • your children or your spouse are here
      • your belongings are stored here
      • this is the base from which you wander.
  • If you are ordinarily resident, then you are a tax resident. Period.
  • If you are not ordinarily resident, then you are still a resident if you are present in South Africa
    • for a total of 91 days during the year of assessment and
    • for a total of 91 days during each of the 5 years prior to the year of assessment and
    • for a total of at least 915 days during those prior 5 years.
  • If you are a resident, but have been absent from South Africa for a continuous period of at least 330 days, then you were not a resident whilst absent.

And what about being taxed if working overseas? Note that this only applies to residents, because they would normally be taxed on their worldwide earnings. It is not a test of residence. you will find it in s10(1)(o)(ii) of the Income Tax Act.

  • If a South African resident is an employee of, and rendering services outside South Africa for, a foreign or South African company, then, the first R1,25m of that income is exempt from South African tax provided –
    • the service is rendered for at least 183 days outside South Africa in any 12-month period (not necessarily a tax year) and
    • it is rendered continuously for at least 61 consecutive days in the same period.
  • Note that it is only the income earned outside South Africa that is exempt. Normal tax applies to income earned within South Africa or from a South African source.




  1. David G Hart

    The R1.25m exemption story is a little more complicated. In addition to the requirements listed above, the extent of the exempt income is calculated from the offshore earnings x the ratio of working days outside the country / total working days in the relevant period. R1.25m is then the max exemption that can be claimed

    1. Thank you for that David,
      I am always happy to learn from anyone who is more knowledgeable than me.
      I have re-read the Act and cannot find a reference to your assertion. Please be so kind as to give it to me and, if necessary, I will amend the article.

    2. Hi Dave,

      Thank you for the speedy response. You are referring to Interpretation Note 16 (Issue 4) of 28 June 2021.

      S10(1)(o)(i) refers to crews of ships, so does not apply.

      The questions that you were asked on your tax return are clearly necessary in terms of your compliance with (ii).

      The apportionment only arises if the period of absence was not continuous and it makes absolute sense. If you’re back in RSA during your period of foreign employment then you are deemed to be earning that income continuously and therefore part of it will be deemed to have been from a South African source.

XHTML: You can use these tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

Need help with your Trust or Business?

Contact us today or set up a free meeting with our CEO, Derek Springett. We have been offering expert advice and business services since 1971. You can also view see our full list of services.

If you enjoyed this article, you may like to subscribe to the monthly round up featuring all of my latest articles. Then check out the three books I have written which have proved to be very popular.

Complete the form below to subscribe to my monthly round up.

Do you want to leave your cart?

Your cart is awaiting your next purchase, so please proceed to the Home page and continue shopping. If you are leaving your cart because of problems, why not give us a call on our 24 hr numbers 063 866 8928 or 011 805 0030 (subject to load shedding)? If all else fails, call Derek, our CEO on 082 552 9696. We’ll do what we can to help