South Africans with money abroad – SARS is coming for you

South African expatriates who ignore tax obligations will soon be placed in the hot water of the South African Revenue Service (SARS), warning Jashwin Baijoo, Legal Manager at Tax Consulting South Africa.

Baijoo said these expatriates need to urgently check their compliance status with tax professionals.

This is especially true for people working in African countries. They may blindly assume that they are not taxed because of the double taxation agreement with South Africa.

“Legal, every South African, anywhere on the planet, must declare the world’s annual income to SARS and pay taxes on that income for the rest of his life,” Baijoo said. Mr. says.

“Until now, most expatriate income was tax exempt, but from March 1, 2020, income exceeding R12.5 million will be taxed up to 45%.”

In addition, he said, if expatriates working in Africa work for businessmen, self-employed, or foreign companies, they will be interim taxpayers.

“Temporary taxpayers are those who earn income from sources other than employment with their employers registered with PAYE in South Africa,” says Baijoo.

“If so, they must declare their estimated annual income in advance, pay half of the tax by August 31st, and pay the rest by February 28th or 29th of the following year. “

Double tax treaty

Baijoo said African countries have double taxation agreements with South Africa to prevent expatriates from being taxed by both governments.

However, this does not free them from declaring their annual income to both SARS and the tax authorities of the country. Also, if the tax in that country is less than the tax that would be paid in South Africa, they may have to pay the difference to SARS.

The double taxation agreements of each country have different requirements and reiterate the importance of the support of expatriate tax professionals.

“Most of the cases we deal with are the result of bad tax planning by people who have no knowledge or qualifications about the complexity of expatriate tax.”

“Unfortunately, recent tax law amendments could impose up to two years’ imprisonment for surveillance, even for expatriates who simply fail to file their tax returns.”

According to Baijoo, it’s also dangerous to believe that SARS can never know about hidden income, as was possible in the past.

The South African government recently provided SARS with R $ 3 billion to enhance auditing and tracking capabilities using advanced technologies such as artificial intelligence (AI).

Tax authorities also participate in sharing financial information with many other countries as part of their global efforts to reduce tax evasion and money laundering.

“In fact, SARS is gaining incredible power to detect compliance breaches through third-party data and is rapidly approaching delinquent taxpayers,” he said. It was.

400 billion rants hidden abroad

In April, SARS Commissioner Edward Kieswetter announced that tax collectors would focus on estimates. 400 billion rants I hid it in an overseas account.

According to Keith Wetter, South Africa has automatic exchanges of information protocols with about 160 countries, with actual data coming from 87 countries.

“We noticed that we received about 1.38 million reportable records from these countries during the 2019 reporting period.

“(These records) show that offshore accounts hold about 26.6 billion rants only from these 87 countries. In this way, we reach well over 400 billion rants. , It depends on the exchange rate of the day, but it is a simple conversion. “

Reinert van Rensburg, a Tax Consulting SA specialist, said these comments should be a warning for South Africans with foreign assets to solve the problem.

“Under the Automatic Information Exchange (AEOI) Agreement signed up by SARS in 2014, SARS will now automatically receive all necessary information regarding foreign sources of income for tax residents in South Africa.

“This information includes the individual’s name, tax reference number, account number, account balance, and income generated from the account. The reality is that South African taxpayers currently hold R $ 400 billion abroad. It is the access to this detailed information that has awakened SARS, “he said.

read: South Africans are taking time to repay government debt every year

South Africans with money abroad – SARS is coming for you

Source link South Africans with money abroad – SARS is coming for you

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