Author Topic: Tax  (Read 189983 times)

Orca

  • Hero Member
  • *****
  • Posts: 2274
  • Karma: +54/-3
    • View Profile
Re: Tax
« Reply #240 on: April 30, 2014, 06:51:07 pm »
You are a non resident temporally overseas according to SARS.
You have to file your e-filing every year and if you are considered as a trader in SA, then you will be a Provisional Taxpayer and must file twice per year plus the end of year normal tax.
Your gains as a trader will attract normal tax and you will pay tax on Capital Gains at 33.3% added to your yearly income that would be zero as you don't have other income here. Less the 30k exclusion.
Your income is taxed in Australia so it won't affect your SA stuff so I would not declare it. You can but it will not be included as SA only taxes at SA source and it was not sourced here.

That said. You have a predicament now. Once your SA stocks are held for 3 years, you will continue to pay CGT in SA on any disposals as long as you have not formally emigrated.

Once you have formally emigrated, your Capital Gains are tax free (for non property stocks) as is Divies and Interest. This, you may be taxed on in Australia at their rates though. You will have to do your own research there.
If you do get taxed there on SA stuff then it really makes makes no diffs where you pay it as the difference will be minimal and you get credit for any tax paid in SA due to the DTA.

As to your FX question. No ways. This is your prob and will have to live with it. Exchange rates and bank fees as far as I know are not tax deductible with money transfers.

You can officially emigrate without coming to SA to do it. I can give you details and it is not expensive. 




 
« Last Edit: April 30, 2014, 06:58:00 pm by Orca »
I started here with nothing and still have most of it left.

Orca

  • Hero Member
  • *****
  • Posts: 2274
  • Karma: +54/-3
    • View Profile
Re: Tax
« Reply #241 on: April 30, 2014, 07:54:57 pm »
 I will post this tax thread here for those wanting to emigrate.

If you have assets other than property or property stocks in SA and wish to hold them in SA then this is for you. Part one.

If you formally emigrate you get a Blocked Bank Account in SA. This means that you can only do SA money transfers locally. If you want to transfer money overseas, you can only do so via an email to your bank that will use SWIFT to transfer the money into your overseas account. This is to keep track of your money for the SARB regulations. They have to after all know how much you are withdrawing from SA and how much in total is going out and coming into the country.

All your SA bank accounts will be closed except for your Non Resident Blocked Account at the bank of your choice. All your cards must be handed back to the banks and canceled. You will leave only with your blocked account card for local money transfers to creditors.

You must fill in the MP336(b) and the SARS IT21(a) and hand them in at your bank. I have found FNB to be the most helpful. Make sure you have your e-tickets for your flights, ID docs and passports for them to make copies to include them in you application.

This done, you go to SARS with the stamped docs mentioned and they will look if your tax is up to date and nothing owing. They will give you a tax clearance for emigration that will take some days to clear.

Once cleared, you will get a Tax Clearance Certificate. This you take to your bank with the original docs and off you go.









 
I started here with nothing and still have most of it left.

Orca

  • Hero Member
  • *****
  • Posts: 2274
  • Karma: +54/-3
    • View Profile
Re: Tax
« Reply #242 on: April 30, 2014, 08:57:54 pm »
Part two.

Now you are officially emigrated but will still keep your SA citizenship if applicable. ie You were a SA citizen. You do not loose it.

All your Capital Gains from stocks held in SA that are non property after you have emigrated will be tax free but if you are still a trader and sell stocks within the 3 year thingy then you will still pay normal tax as you are carrying on a trade in SA.

This is why I chose Portugal as they become a tax haven.

Before I get to this I must add that Portugal has a cost of living that is cheaper than SA especially in the North or inland. The South has become too British and expensive. I can live cheaper in Portugal than in SA. Some may say that Eastern Europe is cheaper and I agree but the winters are too harsh for me.

Back to the tax haven.
As a SA emigrant, I will not pay tax on my SA Capital Gains as I do not own property stocks. Portugal has a new system that allows immigrants to register as Non Habitual Residents and be tax free for 10 years to attract foreign money.

This means that I pay no tax anywhere. How good is that?

They also have a Golden Visa for non EU residents where you can get Portugal citizenship if you have big bucks or employ 10 locals. You will only pay 20% flat rate tax. No matter how big your business.

So if you are considering emigration, I would suggest Portugal.
 

 

 

 
I started here with nothing and still have most of it left.

[email protected]

  • I've just arrived
  • *
  • Posts: 48
  • Karma: +6/-0
    • View Profile
Re: Tax
« Reply #243 on: May 01, 2014, 03:53:08 pm »


2-I am not emigrating.I am just a non-resident.Am I correct in assuming that as a non-resident I do not have to submit anything except change my adress?


Key concept of resident (for tax purposes), is whether the SA tax act deems you to be a resident etc.

You say you are a non-resident, but haven't formally emigrated.  Some questions which will go a long way to resolving your post.
1.  Even though you are out of the country, do you still see SA as your home?  Are you maintaining a household in SA?  When (or if) do you see yourself returning to SA?
2,  How long have you been out the country?  How many days a year a year do you spend out the country.

I'll address your other questions in a separate post once i have clarity on the above.


Delusionsofgrandeur

  • Jr. Member
  • **
  • Posts: 79
  • Karma: +1/-0
    • View Profile
Re: Tax
« Reply #244 on: May 12, 2014, 01:20:20 pm »
1-I am not maintaining a household in S.A.I do not see myself returning to S.A in the near future,for at least 5 years if at all.I do see S.A as my home,but I don't specifically have any intention of going back unless I have to.

2-I have been out of the country for 3 years and have not returned since.I may return to visit people for s short period of time but I plan to stay out of country for the foreseeable future.

Orca

  • Hero Member
  • *****
  • Posts: 2274
  • Karma: +54/-3
    • View Profile
Re: Tax
« Reply #245 on: May 12, 2014, 07:34:30 pm »
So SARS will still consider you as a SA tax payer temporarily living abroad. So you must use an agent with POA to Officially Emigrate you.
I would recommend exchange4free.co.za to do it for you. With my research, I have found them to be the cheapest and the best to use for FX rates should you wish to sell SA shares and send it to you. The full fee is just under R10 000.00 but is well worth it as they have tax consultants and banking guys that will open a Blocked SA bank account for you.

A Blocked SA bank account is merely an account that is monitored by your bank according to SARB exchange rules. You can use it only in SA transactions freely but if you want to send money abroad, you have to email your bank agent. They will do so for you but the above agent can also do it.

I would recommend you to officially emigrate as it is tax effective. No divi tax and no tax on interest.

   
I started here with nothing and still have most of it left.

Patrick

  • Administrator
  • Hero Member
  • *****
  • Posts: 2550
  • Karma: +47/-2
    • View Profile
Re: Tax
« Reply #246 on: May 13, 2014, 02:30:55 pm »
I would recommend you to officially emigrate as it is tax effective. No divi tax and no tax on interest.

Are you allowed to keep your SA passport and work again in SA if you wanted to?

Orca

  • Hero Member
  • *****
  • Posts: 2274
  • Karma: +54/-3
    • View Profile
Re: Tax
« Reply #247 on: May 13, 2014, 04:20:57 pm »
You get classed as a non SA resident but keep your passport and citizenship. Even if you stay long enough in your new country and become a citizen, you keep your SA citizenship.
Two of my daughters are citizens of SA, Finland and UK.
I started here with nothing and still have most of it left.

[email protected]

  • I've just arrived
  • *
  • Posts: 48
  • Karma: +6/-0
    • View Profile
Re: Tax
« Reply #248 on: May 13, 2014, 09:07:03 pm »
Hi Orca

Your interpretation of SA residence is incorrect.  At no stage does the lack of formal immigration automatically treat you as a South African tax resident for tax purposes.  It is of course a indicator of residence, but not a conclusive one.  Just think of all the kids that have done there 2 years in the UK and never come back - with no intention of coming back.  They have never formally emigrated, but are not regarded as South African residents for tax purposes.

1-I am not maintaining a household in S.A.I do not see myself returning to S.A in the near future,for at least 5 years if at all.I do see S.A as my home,but I don't specifically have any intention of going back unless I have to.

2-I have been out of the country for 3 years and have not returned since.I may return to visit people for s short period of time but I plan to stay out of country for the foreseeable future.

As detailed in one of my earlier posts, there are 2 tests.  One being regarded as a SA residence under common law, and another via the so called physical residence test..  Hence the 2 questions above.  To interpret your answers and give you guidance.

1.  Under common law, you will be regarded as a SA resident for tax purposes, if you regard SA as your home.  Case law has also indicated that if it is your intention to return to SA after your wanderings, you would be regarded as a SA resident.  The whole concept is a bit "iffy", and if you had to re-evaluate your position and find that you have no real intention (with no contradictory evidence) of returning to SA, i'd say you could regard yourself as a non-resident.  The fact that you have no SA household and no-need to return assists in this argument.

2.  Under the physical presence test, as long as you're not in the country for a certain period of times (90 days plus in a tax year) for each of the last 5 tax years), then you don't meet the requirements of being regarded as a SA resident via the physical residence test.  In your case, you don't meet this requirement for SA residency.

Hence, you'd have a good argument for being regarded as a non-resident for tax purposes.

Hope it all makes sense

[email protected]

  • I've just arrived
  • *
  • Posts: 48
  • Karma: +6/-0
    • View Profile
Re: Tax
« Reply #249 on: May 13, 2014, 09:08:29 pm »
Oh.  Almost forgot.  Do not confuse citizenship, residency and being a resident for tax purposes.  They are different animals.

Orca

  • Hero Member
  • *****
  • Posts: 2274
  • Karma: +54/-3
    • View Profile
Re: Tax
« Reply #250 on: May 14, 2014, 01:40:57 pm »
Delusion and I will have assets in SA in the form of shares on the JSE. As my wife and I have formally emigrated, we cease to be residents and will pay no tax on divies and our interest earned will also not be taxed.
Delusion on the other hand, has not formally emigrated and will have to pay the witholding tax on all his divies and normal tax on his interest if over the limit here as normal.
Lump sum pay outs of RA's, insurance etc from SA can't be moved overseas without the SARB permission. This can only be done via a non resident blocked bank account.
Delusion does not have to complete the tax clearance form IT21(a) as he has not been back in SA for 5 years.
He will have to download the SARB form MP336(b) and post it to his bank in SA together with certified copies of his ID/passport , proof of residence and his foreign residence permit. The bank will do the rest at a cost of R1 200.00.
From then onwards, he can remit funds freely up to R1m pa via his blocked account.
I started here with nothing and still have most of it left.

Orca

  • Hero Member
  • *****
  • Posts: 2274
  • Karma: +54/-3
    • View Profile
Re: Tax
« Reply #251 on: May 14, 2014, 01:59:20 pm »
From SARB website.
I started here with nothing and still have most of it left.

[email protected]

  • I've just arrived
  • *
  • Posts: 48
  • Karma: +6/-0
    • View Profile
Re: Tax
« Reply #252 on: May 14, 2014, 05:36:19 pm »
Delusion and I will have assets in SA in the form of shares on the JSE. As my wife and I have formally emigrated, we cease to be residents and will pay no tax on divies and our interest earned will also not be taxed.
Delusion on the other hand, has not formally emigrated and will have to pay the witholding tax on all his divies and normal tax on his interest if over the limit here as normal.


Hi Orca

Wrong on multiple accounts.

1.   There is absolutely no reference to formal immigration in the South African income tax act as far as tax residency is concerned.  You can for example formally immigrate, and be found to be a SA resident via the physical residence test.  For your reference, the definition of residence in the income tax act is as follows. 
"resident

means any—
a)natural person who is—
i)ordinarily resident in the Republic: or
ii)not at any time during the relevant year of assessment ordinarily resident in the Republic, if that person was physically present in the Republic-
aa)for a period or periods exceeding 91 days in aggregate during the relevant year of assessment, as well as for a period or periods exceeding 91 days in aggregate during each of the five years of assessment preceding such year of assessment; and
bb)for a period or periods exceeding 915 days in aggregate during those five preceding years of assessment,
in which case that person will be a resident with effect from the first day of that relevant year of assessment,"


The act of formally emigrating will assist in determining if you are ordinarily resident in the SA.  But it is not the only test.

2.  Any dividends paid to a non-SA resident (whether you've formally emigrated or not), will be subject to a dividend withholding tax.  Exceptions include the following;
a)  Where the company declaring the dividend is not resident in SA (i.e.  easy way to remember it, its a non-SA resident company paying a dividend to a non-SA resident.  Why would you pay SA tax on it?)
b) Where the withholding tax is amended by the specific provisions of a double taxation agreement with a country in which you are resident. 

3.  Any interest paid to a non-SA resident (whether you've formally emigrated or not) will typically (there are exceptions) be exempt from South African income tax. 

I also refer you to the SARS info page on the South African tax consequences of being a non-residence are nicely captured on the SARS website.  Note however this is not complete and i advise any individual to consult a professional when the need arises

http://www.sars.gov.za/ClientSegments/Individuals/Learn-About-Taxes/Pages/Non-Residents.aspx

It is also important to differentiate the income tax consequences away from exchange control rules.  They are different animals governed by different legislation.

Another important consideration is other consequences of seeking to be deemed a non-resident, these included deemed capital gains and potential withholding tax on property sales.  It is important to consult an expert if you are affected.  It could save you in the long run.





« Last Edit: May 14, 2014, 05:49:10 pm by XXXXX »

Orca

  • Hero Member
  • *****
  • Posts: 2274
  • Karma: +54/-3
    • View Profile
Re: Tax
« Reply #253 on: May 14, 2014, 06:25:00 pm »
Thanks XXXX. Got confused with divies and CGT. I have non property stocks and I presume Delusional also.

I Quote;

Is a non-resident subject to CGT on the sale of shares?

In general, this is not the case. There is, however, an exception to this rule for property-owning companies. The selling of shares in a property company owned by a non-resident will be subject to CGT if that non-resident–
directly or indirectly owns together with any connected person 20% or more of the equity shares in that company; and
80% or more of the market value of those equity shares at the time of disposal is attributable directly or indirectly to immovable property in South Africa.
I started here with nothing and still have most of it left.

Bundu

  • Full Member
  • ***
  • Posts: 179
  • Karma: +3/-0
    • View Profile
Re: Tax
« Reply #254 on: September 19, 2014, 02:29:36 pm »
so I got stuffed pretty well with the ABL collapse  :'(

Does anybody know how I can deduct these losses from my share profits for tax purposes?

I still own quite a lot of the shares, but can't sell them now to "bank" my loss and don't want to wait till they turn into a CGT loss.......
« Last Edit: Tomorrow at 06:13:55 PM by Bundu »