Don’t have your Nedbank ID yet?
Nedbank ID single sign-on gives you full digital access to Nedbank’s banking and lifestyle products and services on the Money app or Online Banking.
Log in
Log in to Online Banking or another one of our secured services.
Bank your way with low fees and extra benefits.
Enjoy 55 days’ interest free credit and other benefits.
Affordable loans and interest rates from R2k to R300k.
Up to 100% property loan and 105% for first-time buyers.
Debt management support when you need it the most.
Cover for you and your family in the event of death.
Car, building, house contents, valuables and more.
Bond, credit card, overdraft, loan and car repayments.
Guaranteed income and growth plans for future income.
Achieve your financial goals with expert planning.
We’ll help manage your assets, debts and estate planning.
Accounts
-
Everyday banking Simpler more affordable
-
Kids accounts For children under 16
-
Youth banking For 16 to 26 year olds
-
Seniors accounts For 55 years and older
-
Private Clients Personalised banking services
-
Private Wealth The globally integrated account
-
Digital wallet Your phone is your bank account
Credit cards
Digital banking
Switch to Nedbank
Fraud awareness
Forex
Greenbacks
Accounts
-
On demand Money available at any time
-
In 24 hours Cash in your hand the next day
-
In 32 days Funds ready within a month
-
End of term Investments left until maturity
Investment services
Share trading
Personal loans
Home loans
Overdrafts
Vehicle finance
Solar finance
Debt assistance
Funeral cover
Short term insurance
Credit Life
Travel insurance
Business cover
Secure investments
Financial planning
Estate, wills & trust services
Nedbank Private Wealth
Speak to a financial adviser
Blog
Talk to us
Find us
- Login & Register
- Online Banking
- Online Share Trading
- NetBank Business
- NedFleet
- Nedbank Greenbacks
- Nedgroup Investments
- Nedbank ID
- Bank
- Accounts
- Credit cards
- Digital banking
- Switch to Nedbank
- Fraud awareness
- Forex
- Greenbacks
- Explore Bank
- Accounts
- Everyday banking
- Kids accounts
- Youth banking
- Seniors accounts
- Private Clients
- Private Wealth
- Digital wallet
- See all accounts
- Premium banking
- Get help choosing
- Goal saving
- Family Banking
- Refugees and asylum seekers
- FAQ
- How-to guides
- Discontinued accounts
- Everyday banking
- MiGoals Premium
- MiGoals Plus
- MiGoals
- Kids accounts
- MiGoals4Kids
- Youth banking
- MiGoals Premium
- MiGoals
- MiGoals Plus
- Seniors accounts
- MiGoals Premium Senior
- MiGoals Plus
- Private Clients
- Pay-as-you-use
- Young Professionals
- Private Bundle and Private One
- Private Wealth
- Private Wealth Bundle
- Digital wallet
- MobiMoney
- American Express
- Amex Gold
- Amex Platinum
- Digital banking
- Switch to Nedbank
- Fraud awareness
- Forex
- Greenbacks
- Exclusive discounts
- FAQ
- How-to guides
- Save & Invest
- Accounts
- Investment services
- Share trading
- Explore Save & Invest
- In 24 hours
- JustInvest
- PlatinumInvest
- Tax-free Savings
- MoneyTrader
- EasyAccess Fixed Deposit
- PrimeSelect
- In 32 days
- Electronic 32Day Notice
- 32Day Notice
- End of term
- Tax-free Fixed Deposit
- Electronic Fixed Deposit
- Electronic Optimum Plus
- Platinum Fixed Deposit
- Fixed Deposit
- OptimumPlus
- Investment services
- Share trading
- Borrow
- Personal loans
- Home loans
- Student loans
- Overdrafts
- Vehicle finance
- Solar finance
- Debt assistance
- Explore Borrow
- Personal loans
- Loan consolidation
- Secondhand car loan
- Home improvement loan
- Exclusive short-term loan offers
- Explore loans
- FAQ
- How to guides
- Loan consolidation
- Secondhand car loan
- Home improvement loan
- Exclusive short-term loan offers
- Home loans
- Building loan
- Switching home loan
- Repossessed properties
- Start your home buying journey
- Solar-energy Finance
- Earn R32,000 p/m or less? See offer
- HomeVision extra funds
- Home-buying Toolkit
- Managing your home loan
- Explore home loans
- FAQ
- How to guides
- Track application
- Building loan
- Switching home loan
- Repossessed properties
- Start your home buying journey
- Solar-energy Finance
- Earn R32,000 p/m or less? See offer
- HomeVision extra funds
- Home-buying Toolkit
- Managing your home loan
- Student loans
- Explore student loans
- Overdrafts
- Vehicle finance
- Solar finance
- Debt assistance
- Consolidate all your debts into a simple loan | Nedbank
- Short-term payment relief | Nedbank
- Take charge and restructure your finances | Nedbank
- Assisted-sales solutions for homes and vehicles | Nedbank
- Flexible payment plans for loans and credit | Nedbank
- Understanding how repo rate works | Nedbank
- Consolidate all your debts into a simple loan | Nedbank
- Short-term payment relief | Nedbank
- Take charge and restructure your finances | Nedbank
- Assisted-sales solutions for homes and vehicles | Nedbank
- Flexible payment plans for loans and credit | Nedbank
- Understanding how repo rate works | Nedbank
- Insure
- Life cover
- Funeral cover
- Short term insurance
- Credit Life
- Travel insurance
- Business cover
- Secure investments
- Explore Insure
- Life cover
- Get a call back
- Explore MyCover life
- Funeral cover
- Individual R10,000
- Individual R30,000
- Family Cover
- Build your own cover
- Get a call back
- Explore MyCover Funeral
- Individual R10,000
- Individual R30,000
- Family Cover
- Build your own cover
- Short term insurance
- Vehicle insurance
- Building insurance
- House contents insurance
- Valuables insurance
- Valuables insurance
- Get a call back
- Explore MyCover short term insurance
- Vehicle insurance
- Building insurance
- House contents insurance
- Valuables insurance
- Valuables insurance
- Credit Life
- Home loan credit life
- MFC Vehicle Finance Assurance
- Overdraft Assurance
- Balance Protection Plan
- Personal loan Assurance
- Get a call back
- Explore credit life
- Home loan credit life
- MFC Vehicle Finance Assurance
- Overdraft Assurance
- Balance Protection Plan
- Personal loan Assurance
- Travel insurance
- Business cover
- Secure investments
- Guaranteed Growth Income Plan
- Guaranteed Growth Plan
- Get a call back
- Explore MyCover Funeral
- Guaranteed Growth Income Plan
- Guaranteed Growth Plan
- Plan
- Financial planning
- Estate, wills & trust services
- Nedbank Private Wealth
- Speak to a financial adviser
- Explore Plan
- Financial planning
- Investment planning
- Insurance planning
- Give
- Retirement planning
- Investment planning
- Insurance planning
- Give
- Retirement planning
- Estate, wills & trust services
- Will drafting
- Ensure your estate is managed by an executor | Nedbank
- Trust services
- Financial accounting
- Tax services
- Leave the admin of your estate to us, and not to your loved ones | Nedbank
- Will drafting
- Ensure your estate is managed by an executor | Nedbank
- Trust services
- Financial accounting
- Tax services
- Leave the admin of your estate to us, and not to your loved ones | Nedbank
- Nedbank Private Wealth
- Speak to a financial adviser
- Learn
- Blog
- Explore Learn
- Blog
- Contact us
- Talk to us
- Find us
- Explore Contact us
- Talk to us
- Find us
International work and South African tax laws
International work and South African tax laws
Staff writer
Posted 11/07/2023 3 mins
Understand foreign income and tax implications both in SA and internationally.
The tax implications of earning income outside South Africa are becoming more of an issue for many of us. In an era when remote work and international investing are much more accessible via the internet, taxable international earnings can come from dividends, direct employment, rental income, interest or royalties.
‘How does the South African Revenue Service (SARS) tax this type of income?’ you may ask. ‘Is it simpler to have a forex account for earnings made outside the country?’
Ultimately, you need to know whether any income you receive from a foreign source is taxable in South Africa, which means you should declare it in your South African tax return. The short answer, as you may have guessed, is ‘Yes.’
How tax on international income is calculated
SARS calculates tax rebates on foreign tax according to the following formula as its taxation limit:
[total normal tax in South Africa] x [taxable foreign income]
[total taxable income]
If the total foreign tax paid exceeds the limitation amount, the excess amount may be carried to the following tax year.
It’s easier to keep track of your tax responsibilities with the help of a professional adviser
However, a loss incurred in carrying on a business outside South Africa may not be set off against income in South Africa. The amount of foreign tax payable must be converted to South African currency at the last day of the tax year by applying the average rate for that tax year. Foreign income is then converted to rands by applying the spot exchange rate at the date the income accrues.
In short, the South African tax system adheres to the Worldwide Income regulations on taxation, so if you’re a South African resident with tax responsibilities, you are taxed on all local and foreign income you receive, regardless of where it is paid and where the source of the income is. But there are some foreign tax exemptions. Let’s break it down:
Foreign employment income tax
Any income from any global source is taxable if you are registered as a South African taxpayer, but there are some exemptions – capped at an income of R1.25 million since March 2020. These exemptions apply mainly if you have a formal employment contract (either with a resident or non-resident employer), if you earn a certain type of remuneration, and if you spend at least 183 days (about 6 months) of a consecutive 12-month period outside SA doing this work, 60 days of which must be consecutive.
If you’re working for a foreign company outside South Africa for extended periods of time, it’s your responsibility to be aware of the tax implications, especially for exemptions. Contact your financial adviser for the correct information and advice, including which documentation is required by SARS for such foreign income tax exemptions.
Income from foreign dividends
South African residents who earn foreign dividends generally have to declare them and pay tax when submitting their South African tax return.
The tax on these dividends depends on the amount and type of shares held in the foreign company, but liability is limited to cases where the taxpayer holds less than 10% of the equity shares and voting rights in the foreign company. In such cases, the foreign dividend received will be taxed.
Where the taxpayer holds at least 10% or more of the equity shares and voting rights in the foreign company, then 100% of the foreign dividend will be exempt in the taxpayer’s hands.
Income from foreign interest
In such investment cases, you need to report the rand equivalent amount to SARS, on a spot exchange rate basis. Unlike local interest, there is no exempt portion – however, you can deduct any foreign tax you pay.
Income from foreign rental properties
Foreign rental income from property registered in the taxpayer’s name is taxable for all South African residents. Any expenses related to earning the rental income that normally come with owning and maintaining a property, such as bond costs, insurance and repairs, can be claimed as a deduction, so you can reduce your tax liability.
If the country in which the property is located has deducted or withheld taxes from your rental income, these can be deducted as a foreign tax credit, so you won’t have to pay tax twice.
Income from foreign trade while based in South Africa
If you earn business or freelance income from a foreign country while based in South Africa, you need to declare the rand value of only the profit from this in your tax return. This portion will be taxed just like a local business, so you can deduct all your trading-related expenses from your business income.
Income from foreign royalties
This last, fairly straightforward category includes South African taxpayers who receive royalty income from the use of trademarks, patents, mineral rights, or artistic or literary works from outside South Africa. In all such cases, you’ll be liable to pay foreign royalty income tax when submitting your South African tax return, but not South African taxes as well.
It’s easier to keep track of your tax responsibilities if you have several income streams in South Africa and abroad with the help of a professional adviser. Our international banking specialists can help.