In addition, South Africa and the United Arab Emirates have entered into a double taxation agreement that provides provisions for certain South African nationals who meet the conditions set out in the agreement for the termination of their South African tax residence under the treaty. South African tax law stipulates that if a person is considered to be residing exclusively in another country under a contract, he or she is considered non-resident in South Africa, regardless of South Africa`s national law. If this is the case, these persons will not be domiciled in South Africa tax-free and will only be subject to income tax in South Africa on South African income. It is important that the new tax treaty of the United Arab Emirates and South Africa, which can offer them protection, is now in force for these people, subject to their specific position. The above navigation area can be used to access the texts of the corresponding agreements. It should be noted that, if there is a double taxation agreement between South Africa and the host country, South Africans may violate their South African residence under the Double Taxation Convention. South Africa has agreements with a number of non-tax jurisdictions, such as Qatar and Saudi Arabia. An agreement with the United Arab Emirates also came into force this year. The agreements between the two tax administrations in two countries are intended to allow administrations to eliminate double taxation. The tax exemption would therefore not apply to persons operating in non-tax zones throughout the Middle East. The proposed amendment to the exemption should therefore bring the exemption more in line with its original purpose. Recent amendments also allow revenue from secondary meeting days in South Africa to be included in the waiver.
Under current rules, South Africans who reside in South Africa under national tax law while working abroad are exempt from workers` income tax in South Africa on labour income earned abroad, provided that, from an individual point of view, South Africans living in the United Arab Emirates are subject to South African income tax on their income. United Arab Emirates, even if it is won and paid for in the United Arab Emirates. That said, it is almost certain that the proposed change, if implemented, would lead to South African expatriates living in the United Arab Emirates and levying South African taxes on their labour income. The double taxation conventions (DBAs) and the protocols already in force were divided into two groups in order to facilitate navigation, that is, in the speech on the State Budget of South Africa for 2017, the Minister of Finance proposed to amend the exemption from income tax for foreign employment so that it applies only if income is taxed in the foreign jurisdiction. For a full status of all DBAs and protocols, whether they are still under negotiation, they have already been signed but have not been ratified in any of the Member States or are in force, we insert below a status review document. The main purpose of the exemption was to reduce administrative burdens related to international workers and not to grant a full exemption. South African employers with expatriates in non-tax zones need to think: South African nationals living and working abroad will often remain in South Africa under national law. However, under current legislation, income from work they earn abroad can often be exempted in South Africa. Those potentially affected should analyze their specific facts and circumstances for: South Africans working abroad should be aware of a proposed change to the foreign income exemption, as announced in the last budget.