A review of the residency definition for natural persons in the South African income tax regime
Abstract
In a multi-national world where traveling abroad and working across the globe is a very common occurrence, the question regarding one's residency status in each respective country becomes a crucial one. South Africa recently proposed an amendment to its Income Taxation Act, S10(1)(o), which would entail South Africans working abroad being taxed in South Africa on their income earned in other countries if this income is above R1 million. This means that now, more than ever, an individual's residency status is important to ensure that he or she is rightfully taxed in the appropriate country and that non-compliance of the Income Taxation Act is prevented as far as possible. In addition, residency status ensures that uncertainties regarding our definition of residency are addressed and possible amendments in order to achieve this were researched. In order to achieve this, the South African residency definition for natural persons were reviewed in this paper, and an international comparison were performed between South Africa and other countries in order to determine what South Africa could possibly change regarding their definition to ensure non-compliance is kept to a minimum.