If you’re South African and earning an income overseas, there are a few things you’ll need to remember about income tax in South Africa. Even if you've packed up your things and moved abroad, you may still need to pay taxes here if you're recognised as a tax resident in South Africa. 

In this article, you will learn:

• What is a Double Tax Treaty?
• How Many Double Tax Treaties does South Africa have?
• African Country Double Tax Treaties
• European Country Double Tax Treaties
• Asian and Pacific Country Double Tax Treaties
• North and South America Double Tax Treaties
• Middle East Double Tax Treaties
• Stay organised for tax time with QuickBooks Online

What is a Double Tax Treaty?

A Double Tax Treaty (DTT), also known as a Double Tax Agreement (DTA), is a legal agreement between two countries which clearly states where a person's tax liability resides. 

As a South African resident earning an income from a foreign country, you may end up in a situation where you are paying both foreign taxes and South African taxes. 

Nobody wants to pay taxes twice, so it’s worthwhile to check your tax liability with the South African Revenue Service (SARS) to make sure you're filing your income tax return correctly. 

Double taxation agreements stop a taxpayer from paying excessive taxes for South Africa and the related country specified in the contract. 

Amendments, that took effect on 1 March 2020, state that the tax-exempt status for South African tax residents earning an income from abroad would only apply to the first R1.25 million in revenue, after that, they will have to pay income tax on their overseas earnings. 

How Many Double Tax Treaties does South Africa have?

Compared to other African countries, South Africa has the largest network of income tax treaties, having established 79 tax treaties across the following locations: 

1. 23 African countries 
2. 28 European countries 
3. 13 Pacific and Asian countries 
4. 6 with South and North America 
5. 9 in the Middle East 

African Country Double Tax Treaties 

South Africa’s tax treaty network is spread throughout Africa in Southern African Development Community (SADC) countries, North African countries, West African countries, and East African countries. The main focus is to continue expanding and improving the treaty network within Africa, within and beyond the following countries:

European Country Double Tax Treaties 

South Africa has formed double tax treaties with 28 European countries. For South Africa, the United Kingdom (UK) tax treaty was especially important as they are one of South Africa's largest trading partners. 

If you’re a South African tax resident earning income in the UK, you can learn more about your tax situation on the UK government website. 

Other countries in Europe that have a tax treaty with South Africa include the following: 

Asian and Pacific Country Double Tax Treaties 

South Africa has income tax treaties with 13 countries in Asia and the Asia-Pacific region. To confirm whether or not the country you work with belongs to this region, the following countries have a double tax treaty with South Africa: 

North and South America Double Tax Treaties 

Only six American countries currently have double tax treaties with South Africa. The South African US tax treaty was initially terminated in 1987 due to the Anti-Apartheid Act (1986), however, in 1997, the double tax treaty between the US and South Africa was revived.

Canada also holds a double tax treaty with South Africa, the Canada-South Africa tax treaty has been in effect since 1997. The following North and South American countries hold a double tax treaty with South Africa:

Middle East Double Tax Treaties 

Out of the Middle East’s 18 countries, South Africa only has treaties with nine of the 18 countries. These include the following:

You can learn more about this income and business tax in South Africa by reading this small business tax guide and this article on how to file your own business tax. 

Stay organised for tax time with QuickBooks Online

Staying on top of your taxes and finances while making time to grow your business can be hard. Fortunately, with QuickBooks, managing your expenses and income has become so much easier, leaving you with more time to focus on growing your business. 

Try QuickBooks online today with a free 30-day trial.

FAQs

Disclaimer: This page is provided for general information purposes only and does not constitute accounting, tax, business, or legal advice. You should always consult your own advisors for advice relating to your business or situation. Always consult SARS directly as information changes from time to time.