Foreign Income Tax Exception

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Here is the advice our panel of experts gave about Foreign Income Tax Exemption to a subscriber:

Foreign income tax exemption

Question:

Do independent contractors working outside South Africa qualify for the foreign income tax exemption?

If I’m a common law independent contractor and I work outside South Africa through a South African broker, do I qualify for foreign income tax exemption?
If I do, what PAYE code must I use?

Answer:
If you are an independent contractor, or even self-employed, the tax exemption on foreign-earned income won’t apply to you. You need to be posted outside the country working for an employer in terms of an employment contract.
In other words, you would only qualify if you were just a normal employee, not an independent contractor.

Other questions answered about employees’ tax in the Practical Tax Loose Leaf Service:

• We only traded for one month this year. We, however, have learnership agreements in place. How do we calculate our learnership claim for the tax year?
• How does the relocation allowance work?
• Our director has been seconded to Australia – is he liable for Australian tax?
• Are reimbursive allowances taxable?
• Can we deduct PAYE from a contractor who works fixed hours?

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