The income tax provisions that are applicable to foreign employees temporarily working in South Africa

The taxation of foreign employees who are temporarily working in South Africa has been an area of focus for the South African Revenue Service (‘SARS’) since the introduction of the SARS special project in July 2010 (, 2010). According to Brand South Africa (, 2002), ‘global companies with a presence in South Africa cite numerous advantages for setting up shop in the country’. Having worked for one of the Big 4 Global Audit firms in the expatriate department, it is the author’s experience that multinational companies operating in South Africa often utilize expatriate employees for their business needs. The purpose of this research report is to provide an in depth analysis on the problems with the current income tax provisions that are applicable to expatriates (foreign employees temporarily working in South Africa who are not resident for tax purposes in South Africa) and contrasts the provisions with the SARS practice generally prevailing as detailed in the SARS Guide on the Taxation of Foreigners Working in South Africa, SARS interpretation notes and SARS binding private rulings and the tax principles as adopted by the Organisation for Economic Co-operation and Development (‘OECD’) as published in the OECD Model Tax Convention on Income and on Capital. An analysis of the current tax provisions suggests that income sourcing provisions as found in s 9 (source of income provisions) of the Income Tax Act and interpreted by the South African courts need to be further developed to address remuneration sourcing provisions which will cater for expatriates working in South Africa. Further, the complexity of domestic tax legislation and the Double Tax Agreement provisions make compliance and implementation difficult.
A research report submitted to the Faculty of Commerce, Law and Management in partial fulfilment of the requirements for the degree of Master of Commerce (specialising in Taxation) , Johannesburg, 2018
Mazwi, Zukile Dumo, (2018) The income tax provisions that are applicable to foreign employees temporarily working in South Africa, University of the Witwatersrand, Johannesburg,