SARS Income Tax

Some basic information

First I have to state that we are not tax consultants and by German law are not allowed to give any tax advice. Please speak to a professional tax consultant if you have any questions regarding your taxes in South Africa.

The SARS tax year is named by the year in which it ends e.g. the 2024 tax year runs from 1 March 2023 to the end of February 2024
South Africa uses a Residence base tax system and Germany a Source base system.
If you are still a tax resident in South Africa you have to declare your overseas income on your tax return. Even if you did not receive any income in South Africa. See detailed info on the SARS website
South Africa and Germany have a double taxation treaty which means your taxes in Germany is taken into consideration. Also see the Foreign Employment Income Exemption information on the SARS website.
SARS is now using a system to reduce workload. Personal Income Taxpayers who qualify will receive Auto-Assessments. You can check via this Tool on SARS if you have auto-assessed. If you do not agree with the auto-assessment, please act on it immediately. All info about auto assessments can be found on the SARS website

Double Taxation Treaty between South Africa and Germany

Here are some links from the SARS and Bundesfinanzministeriums(BMF) websites

Can double taxation occur?

The following is quoted from the SARS Website and was valid at the time of publishing- “Yes, if an individual earns employment income in excess of R1.25 million and the double tax agreement between South Africa and the foreign country, if any, does not provide a sole taxing right to one country, both countries will have a right to tax the income. The portion of the income in excess of R1.25 million may end up being double taxed.

Generally, under the provisions of the relevant double tax agreement, if an employee renders services in a foreign country exceeding 183 days, both countries enjoy the right to tax the income. The country of source enjoys the first right to tax the employment income and the country of residence, in our case South Africa, will provide double tax relief in the form of a foreign tax credit to the extent that tax was paid in both countries, subject to limitations.” – More information on the SARS Website

Relief from double tax?

Keep in mind that depending on your situation, if you are over the R1.25 million threshold, you still can claim tax credits for the taxes paid in Germany. The best thing to do is to speak to your tax consultant.

The following was quoted from the SARS website and was valid at the time of publishing. “Section 6quat is the mechanism under South Africa’s domestic law to claim relief from double tax where the amount received for services rendered outside South Africa is subject to tax in South Africa and in the foreign country. This credit may be claimed on assessment through an individual’s income tax return, provided certain requirements are met.

An employer may at his or her discretion, under paragraph 10 of the Fourth Schedule, apply for a directive from SARS to take into account the potential section 6quat credit on a monthly basis to determine the employees’ tax liability. This will have to be done through a dedicated channel at SARS that will be made available to the public.

See the information on Directives under paragraph 10 of the Fourth Schedule.

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Tax Residence in South Africa

Information from SARS on who is regarded as a non-resident

Who is a tax resident in South Africa – Reference SARS

An individual is a resident for tax purposes in South Africa either by way of ordinarily residence or by way of physical presence. The concept of “ordinarily residence” is not clearly defined and the determination of whether or not an individual is an ordinarily resident for tax purposes must be done on a case-by-case basis. A number of factors must be taken into account to make such a determination. Interpretation Note 3 (Issue 2): Resident: Definition in relation to a natural person – ordinarily resident sets out the list of factors that will be taken into account to determine whether an individual is ordinarily resident for tax purposes in South Africa.

An individual can also become a tax resident by way of physical presence. For more details in this regard, refer to Interpretation Note 4 (Issue 5): Resident: Definition in relation to a natural person – physical presence test.

An individual who is deemed to be exclusively a resident of another country for purposes of a tax treaty is excluded from the definition of “resident”. It follows that while an individual may qualify as a resident under the ordinarily resident or physical presence tests, that individual will not be regarded as a resident for South African tax purposes if that person is a resident of another country when applying for a tax treaty.

Cease to be a Resident
Do I need to submit a tax return, even if I work outside of South Africa

Procedure to cease tax residency with SARS

Disclaimer:We are not tax consultants, always refer to a professional Tax consultant concerning your taxes. The Term Financial immigration is not being used anymore. The

South African Inheritance

When you are a South African citizen, living outside of South Africa, there are special rules when inheriting from a South African Estate.
Important is whether you still have a SA ID document, whether you are still a Tax resident and how much the inheritance will be. Sable International shared the following article to help you understand better