Tax help needed

[Mrs. Balls]

Hey!

I will soon be working under a contractor role for an international company.

My net salary will be paid into a foreign bank account and from there (at least for now) I will be transferring funds to relevant SA accounts.

I am unsure on how to structure my tax, I am not looking to optimize it right now as a few things are in progress but need clarity on how to declare income and pay tax.

Some further details here:

* I will be working from home for this company
* The company is based in the UK and I will be based in SA
* I will be doing IT related work for them
* It is a full time position i.e. 40 hours minimum per week with benefits however just under a "Contractor" title


Any help would be appreciated.

 

[ThatGuyJD]

Unless someone on here in a similar situation is willing to share what their tax practitioner/planner figured out for them. As this is a rather complex matter especially if you want to structure/optimise it properly and you can share the upcoming items to the planner so that they are aware and thus can work that into the plans.
May also help to ask other staff members in similar situations how they are doing it.

TLDR: Pay someone knowledgeable and trustworthy.

 

[ThatGuyJD]

@Dom anything to add here that I missed.

 

[Dom]

@Dom anything to add here that I missed.

My 10c - are you hour-based (paid overtime), annual/performance bonuses, has it been previously stipulated that you can claim local expenses, what in included under benefits (a pension/RA will add further complexity), when did you start (for tax filing), do you personally/employer have a tax mandate/directive in place?

As @ThatGuyJD mentioned, it is a bit complex but simpler once you have the ground work done.

 

[EnderZ]

Been an independent contractor for 4 years for an American company, I have someone to help you if you need still. Send me a DM if you haven't found anyone yet.

Basically, you're considered self-employed in SARS eyes, you'll register as a personal income tax. The tax year runs from 1 March to 28/29 February. The tax season, when people submit their tax return forms (Expense, etc), is from July to November depending on the filing method.

My accountant can help explain all this and is happy to answer any questions.

 

[mujeeb1]

@Oj0 You're an accountant also mos?

 

[Dom]

@Hobbit You're an accountant also mos?

Nope - just a wee-wee counter (outsources all of his stuff).

 

[ThatGuyJD]

@Hobbit You're an accountant also mos?

I would be very surprised if that was the case.

 

[Oj0]

@Hobbit You're an accountant also mos?

Not at all - I pay far too much to have accountants, though...

 

[Thorian]

Hey!

I will soon be working under a contractor role for an international company.

My net salary will be paid into a foreign bank account and from there (at least for now) I will be transferring funds to relevant SA accounts.

I am unsure on how to structure my tax, I am not looking to optimize it right now as a few things are in progress but need clarity on how to declare income and pay tax.

Some further details here:

* I will be working from home for this company
* The company is based in the UK and I will be based in SA
* I will be doing IT related work for them
* It is a full time position i.e. 40 hours minimum per week with benefits however just under a "Contractor" title


Any help would be appreciated.

SARS won't know about your accounts outside of SA, But as soon as you start to transfer from that account to your local account they are supposed to have knowledge of it. The Tax law states as far as I know that you could be double taxed, basically they could tax you there and here. But in your case you are receiving your net salary and not actually employed by them you are a subcontractor? You will be liable to pay PAYE and submit your IRP6 returns (Provisional tax returns x2 per year).

So you could basically state that you work for yourself and then you just pay the taxes yourself. But if you do this you can deduct a lot of expenses like rent, repairs & maintenance, fuel, and work-related items. I would recommend asking the company for whom you are going to subcontract to issue invoices at each month-end (It could still be the same amount every month) then when you come to the next financial year end you have proof of all your income. Just keep proof of your expenses so that you can deduct them from your PAYE amount.

 

[Dom]

SARS won't know about your accounts outside of SA, But as soon as you start to transfer from that account to your local account they are supposed to have knowledge of it. The Tax law states as far as I know that you could be double taxed, basically they could tax you there and here. But in your case you are receiving your net salary and not actually employed by them you are a subcontractor? You will be liable to pay PAYE and submit your IRP6 returns (Provisional tax returns x2 per year).

So you could basically state that you work for yourself and then you just pay the taxes yourself. But if you do this you can deduct a lot of expenses like rent, repairs & maintenance, fuel, and work-related items. I would recommend asking the company for whom you are going to subcontract to issue invoices at each month-end (It could still be the same amount every month) then when you come to the next financial year end you have proof of all your income. Just keep proof of your expenses so that you can deduct them from your PAYE amount.

To my knowledge you are still liable (to SARS) unless you migrate your tax residency.

 

[Thorian]

To my knowledge you are still liable (to SARS) unless you migrate your tax residency.

Yes, you are. Even if you are taxed in another country too. All the people teaching in china with the TEFL certificates still need to pay tax here even if they are taxed in china. That's why he will still need to submit a tax return here and pay his taxes (I would recommend paying it via IRP6 returns), but he would be able to claim back a lot of expenses as he would basically be running a business as a sole proprietor.

 

[Thorian]

To my knowledge you are still liable (to SARS) unless you migrate your tax residency.

Just another thing, SARS does have info regarding double taxation somewhere. Some countries are free of double taxation. If I remember correctly Botswana and Namibia are one of these countries where they only tax you there and not here again

 

[Dom]

Just another thing, SARS does have info regarding double taxation somewhere. Some countries are free of double taxation. If I remember correctly Botswana and Namibia are one of these countries where they only tax you there and not here again

Double Taxation Agreements & Protocols | South African Revenue Service

The purpose of the agreements between the two tax administrations of two countries is to enable the administrations to eliminate double taxation. The Double Taxation Agreements (DTAs) and Protocols that are already in force, have been divided into two groups to make navigation easier, i.e.-...

www.sars.gov.za

 

[Thorian]

Double Taxation Agreements & Protocols | South African Revenue Service

The purpose of the agreements between the two tax administrations of two countries is to enable the administrations to eliminate double taxation. The Double Taxation Agreements (DTAs) and Protocols that are already in force, have been divided into two groups to make navigation easier, i.e.-...

www.sars.gov.za

That's the one