A critical analysis of South Africa revoking its income tax exemption for United Nations officials
Date
2019
Authors
Mutwanamba, Ntungufhadzeni Olga
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Abstract
The United Nations (UN) runs an extremely complex payroll system, complicated mainly by the fact that the organisation wants to treat all employees equally, wherever in the world they may be (Loan, 2003). The Charter of the United Nations (UN Charter), signed on 26 June 1945, provided certain privileges and immunities to the UN as an organization, to its officials, and to representatives of Member States to the various organs of the UN. Immunity has been defined in the Oxford Dictionary as ‘protection or exemption from something, especially an obligation or penalty’. Stemming from articles 104 and 105 of the UN Charter, the UN later introduced an exemption from national income taxation on all UN officials’ earnings in terms of section 18(b) of the Convention on the Privileges and Immunities of the United Nations, 1946 (Convention).
Taxing rights and related exemptions are regulated by a country’s tax laws. In South Africa, those are clearly stated in various tax acts. South Africa taxes on a residence basis as clearly stipulated in section 1 of the Income Tax Act 58 of 1962 (Income Tax Act), under the ‘gross income’ definition. Absent the UN Charter and agreements reached regarding UN privileges and immunities, the UN would have to work around avoiding juridical double taxation by determining which countries should have taxing rights on UN employees. The following categories of the UN employees are applicable in this study: South African residents working in South Africa, South African residents working outside South Africa or non-residents working in South Africa. South African residents working outside South Africa will normally obtain a foreign employment income exemption in terms of section 10(1)(o)(ii) of the Income Tax Act. The section will be amended from 01 March 2020 to exempt only the first R1 million earned from foreign employment.
Description
A research report submitted to the Faculty of Commerce, Law and Management in partial fulfilment of the requirements of the degree of Master of Commerce in the field of Taxation, University of the Witwatersrand, Johannesburg, 2019
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Citation
Mutwanamba, Ntungufhadzeni Olga (2019) A critical analysis of South Africa revoking its income tax exemption for United Nations officials, University of the Witwatersrand, Johannesburg, <http://hdl.handle.net/10539/29829>