An analysis by ENSAfrica, Taxand South Africa
South Africa is planning to change its tax rules for foreign employers. Currently, South African resident employers are obliged to deduct employees’ tax from their employees’ remuneration, whereas non-resident employers are only obligated to do so if they have a representative employer in South Africa.
However, a proposed amendment, which may become effective in December 2023 or January 2024, will seek to remove the distinction between resident and non-resident employers. This change will impose a significant and costly administrative burden on many non-resident employers and will be a disincentive to employ individuals in South Africa for remote working arrangements.
Further clarification on the amendment is expected later in November but foreign employers should be aware of the potential impact on their employees’ taxes and potential consequences for cash flow and double taxation complications.
Jenny Klein and Robert Gad of our South African firm, ENSAfrica, analyse the amendment in further detail here.
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