Short-term assignees to South Africa
By Jaco Le Grange, Associate Director, Deloitte
Deloitte Budget 2012 Expectations
Johannesburg, 23 January 2012 - In terms of the definition of “gross income” in section 1 of the Act, non-resident persons are taxable in South Africa on their South African sourced income only.
In the case of individuals, this means that they are taxable in respect of remuneration earned from services rendered in South Africa. South Africa does not have a de minimis rule, i.e., in the case of short term assignees, they would, in principle be taxable on any remuneration from a South African source.
International organisations are increasingly using short-term assignees instead of the traditional long-term assignees due to the costs involved with the latter approach and due to more intelligent and “just-in-time” resourcing of mobile specialists.
A strict source based approach creates administrative complexities even in circumstances where the taxable income of the particular individuals may be relatively small. The administrative complexities are as follows:
We therefore consider that a de minimis rule, eg. 30 days per annum, should be introduced. This rule will exempt remuneration earned by non-resident individuals for services rendered in South Africa if they have not spent more than 30 days in aggregate in South Africa during a tax year or in any 12 month period.