The South African Revenue Service (SARS) has introduced a new interim process to simplify tax return submissions for individuals who are not tax residents of South Africa, but earn South African-sourced income.
The move follows growing confusion among non-resident taxpayers over how to correctly complete their returns, with some required sections not automatically activating on the SARS eFiling platform.
In response, SARS announced an interim solution via its SARS Online Query System (SOQS), allowing non-residents to request access to the correct tax return format.
“A more permanent solution directly on the tax return through the tax return ‘wizard’ will be introduced later,” SARS stated.
How the interim process works
To activate the non-resident section of the tax return:
- Visit the SARS website and click on the SOQS icon.
- Navigate to “Non-Resident Tax Return Type.”
- Fill in the requested personal details.
- A One-Time Pin (OTP) will be sent to the contact details on record.
- Select the 2025 tax year and answer SARS’s prompted questions.
- The return will then be formatted accordingly and accessed through the normal eFiling process.
SARS noted that the information will be retained for use in subsequent years unless a taxpayer’s residency status or other relevant details change.
Who is taxed and how
South Africa operates under a residence-based tax system, meaning:
- Residents are taxed on their worldwide income
- Non-residents are taxed only on income sourced from within South Africa
Non-resident income categories and tax implications
1. Salary income
Salaries earned in South Africa by non-residents are subject to normal tax, unless a Double Taxation Agreement (DTA) provides relief.
DTA conditions typically exempt tax if the employer is foreign, has no permanent establishment in South Africa, and the individual has not been present in the country for more than 183 days.
2. Pensions and annuities
Only amounts related to services rendered within South Africa are taxed.
3. Rental income
Non-residents earning rental income from South African properties must pay normal tax on that income. Certain property-related expenses, like repairs and municipal charges, may be deductible.
4. Interest
Interest from South African sources is generally exempt from normal tax unless the non-resident was in the country for over 183 days or has a debt tied to a local entity. However, withholding tax of 15% may apply.
5. Dividends
Dividends paid by South African companies are subject to a 20% dividend withholding tax, which may be reduced under applicable DTAs.
6. Royalties
Royalties are taxed at 15% withholding, but this may be replaced by normal tax if residency thresholds are met.
7. Capital Gains Tax (CGT)
Non-residents are only subject to CGT on:
- Immovable property (homes, land, farms, etc.)
- Shares or trust interests linked to South African property
- Assets of a permanent establishment in the country
Double taxation and relief
SARS acknowledged the potential for double taxation, where income is taxed in both South Africa and the taxpayer’s country of residence. To mitigate this, DTAs are in place with many countries to determine tax jurisdiction and reduce duplication.
These agreements can exempt or reduce taxes on salaries, pensions, dividends, interest, and royalties, depending on the circumstances and treaty provisions.
SARS Commissioner Edward Kieswetter urged all non-resident taxpayers to ensure their information is up to date on eFiling and to make use of the SOQS until the full functionality is integrated into the main return platform.
Further information, including conditions for estate duties and taxes on foreign entertainers and sportspersons, can be found on the SARS official website: www.sars.gov.za.
Do you fall into this ‘non resident of South Africa, but earn South African-sourced income’ category?
Let us know by leaving a comment below, or send a WhatsApp to 060 011 021 1
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