Page 36 - Nexia Cape Town 2018 TG Digital

RESIDENCE BASED TAX

Residents are taxed on their worldwide income, subject to certain exclusions�

Definition of resident
Natural Person (see flowchart further in this guide)
■ any natural person who is ordinarily resident in South Africa, or
■ any natural person who is not ordinarily resident in South Africa but who:
◆ is physically present in South Africa for a period exceeding 91 days
in aggregate during the current year of assessment and for a period
exceeding 91 days in aggregate during each of the prior five years of
assessment; and was physically present in South Africa for a period
exceeding 915 days in aggregate during the previous five years of
assessments�
◆ Where a person has been outside of South Africa for a continuous period
of at least 330 full days after he ceases to be physically present in South
Africa, he will be deemed to not have been resident from then�
◆ South African resident employees who render services for any employer
outside South Africa for a period which in aggregate exceeds 183 full
days commencing on or ending during a period of assessment, and for
a continuous period exceeding 60 full days during such 183 day period,
will not be liable for income tax on their remuneration for that period�
From 1 March 2020 this exemption will be limited to R1m per year�
Companies and Trusts
A company and Trust will be considered to be resident for tax purposes if it is
incorporated, established, formed or has its place of effective management in
South Africa�
Controlled Foreign Companies (CFC)
A Controlled Foreign Company (CFC) means any foreign company where more
than 50% of the total participation rights or voting rights are directly or indirectly
exercisable by one or more residents� South African residents must impute all

34