A DBA ensures that a subject is not subject to unjustified taxation, both in South Africa and in the country concerned that is treated in a given DBA. It is therefore a defence of double taxation and defines different requirements that a taxpayer must meet in order to understand where that tax subject is as a taxable resident. The agreements between the two tax administrations in two countries are intended to allow administrations to eliminate double taxation. Please note that in South Africa, you work with a passport while meeting the requirements if you are a resident of the South African state. Do I risk paying twice as much tax? In short, you don`t pay double taxes. The objective of the Double Taxation Conventions (DBA) between two countries is to eliminate double taxation. This is good news because it ensures that South Africans who earn more than R1.25 million abroad still pay only the additional tax than the South African Revenue Service (SARS). In other words, if you pay taxes abroad, this tax can be deducted from the South African tax due on your earnings abroad. The above navigation area can be used to access the texts of the corresponding agreements. The amended South African tax law is now fully applicable from 1 March 2020.
If you have international economic interests, your income may be taxed in South Africa and abroad, resulting in double taxation. A widespread misunderstanding that we see among South African expatriates is that they think they are “automatically tax-exempt” simply because there is a double taxation agreement between the two countries. This is totally untrue, and there are several factors that need to be considered and objectively proven, and you are always required by law to file a tax return and “right” exemption with contract discharge. “Most of Africa is covered by double taxation conventions. However, if one couple lives in South Africa and one spouse works mainly outside the country in Africa and the other works in South Africa, it is very likely that they are both considered SA tax residents,” he explains. Double taxation conventions (“DBAs”) are internationally agreed legislation between South Africa and another country. South Africa has dozens of such agreements with different countries and the main objective of a DBA is to ensure that any country subject to the agreement knows what its tax rights are to taxpayers. One of the factors to watch out for is whether there is a double taxation agreement (DBA) between South Africa and the country in which you work, he says.
“Whether you work in a country without ADD or a country where there is a DTA, you always need to know what your true tax status is with SARS,” Louw suggests. The Double Taxation Conventions (DBA) and existing protocols have been divided into two groups to facilitate navigation, i.e. ON UN KNIFE-EDGE: SARS` FOCUS ON EXPATRIATES THIS FILING SEASON Jonty Leon Legal Manager for Expatriate Tax Compliance Louw warns that some people living permanently abroad may need a South African tax number.