GoDubai
  
  
  
  
Citylife > Press Release
  Home Contact us Add to Favourites
Most Recent Postings
More Press Releses
Featured Sections

Event Finder
A daily roundup of exhibitions, promotions and other events in Dubai and the rest of the Emirates.
Submit an Event
Latest Dubai Press Releases >> Banking and Investments

 
  Share
  • South African expats may be unknowingly breaching existing tax rules regarding their offshore investment income and gains
  • Now is the time to correct this before the 31 August 2017 disclosure deadline
  • Offshore bonds offer an invaluable solution to those looking to save tax efficiently 
Dubai - August 29, 2017:  South African (SA) expats have been in uproar following the February 2017 Budget announcement in South Africa that from March 2019 they may need to pay income tax on overseas earnings. 
 
If the proposals are enacted unamended, SA expats living and working in countries where tax is not paid on their earnings, like the UAE, will have to start paying up to 45% tax on their earnings to the South African Revenue Service (SARS) even though they are not physically present there.
 
In the furore over the removal of the ‘foreign earnings exemption', it has become clear that not many SA expats are aware of their existing taxation obligations on savings and investment income and gains, which are not exempted. This is a huge issue, and time is running out to put this right. 
 
Those impacted should seek urgent professional advice, and could look towards offshore bonds to help make their investments more efficient going forwards. 
 
Under current legislation SA expats who have retained their ordinary resident status may need to declare and pay to SARS income tax from investment earnings and on gains. So, for example, a SA expat living in the UAE may need to pay up to 45% in tax to SARS on any investment and savings income they receive on a worldwide basis. 
 
Anyone who hasn't appropriately paid their taxes have been urged by the South African Government to take advantage of the current South African ‘special voluntary disclosure programme', a type of amnesty arrangement, which provides the opportunity to come clean and declare any income and gains received over the years. It will mean paying the required tax to SARS, and penalties, but if done now, it will avoid any potential prosecution. 
 
This deadline coincides with the implementation of the Common Reporting Standards, which both South Africa and the UAE have subscribed to, along with approximately 100 other countries, and will hugely improve global tax transparency.
 
Once the investments have been disclosed, they will become visible to SARS, with the on-going obligation to pay any tax due on the remaining investments. This makes investment choice extremely important for SA expats who will need to consider the best way of managing their investments more effectively going forwards. 
 
Paying income tax and tax on gains to SARS on an arising basis means any active management by the investor could lead to more onerous tax reporting and investment decisions will need to be balanced with tax considerations. 
 
However, there is a way for investors to continue to actively manage their investments whilst minimising any tax reporting burden and ensuring assets become more efficient to manage. By restructuring the assets into appropriately structured single premium offshore bonds, the investor gains much greater control over the timing and nature of any events that are chargeable to tax. 
 
All taxes are deferred within an appropriate offshore bond (except for any withholding taxes that cannot be reclaimed on income or dividends received), and only on a planned encashment would a tax situation arise. They are also more tax effective as any growth is taxed as a capital gain rather than investment and savings income, meaning it attracts a lower effective rate of tax. 
 
David Denton, head of International technical sales for Old Mutual Wealth, comments:
 
“There is a lot of concern from South African expats, especially in countries in the Middle East, which has a benign income tax system, that the new proposals by SARS will have catastrophic consequences. In these discussions it has become apparent that existing tax obligations on investments are largely unknown, and this is something which can be rectified whilst the amnesty is in place. 
 
“Offshore bonds can offer a lifeline to those who want to save for their future but in a tax efficient way, and who don't want to be burdened with ongoing reporting and administration. South African expats clearly have a number of financial planning requirements at present, and I would urge them to speak with their financial adviser as soon as they can.”
 
Ref: 195-17-08



Posted by : GoDubai Editorial Team
Viewed 5899 times
Posted on : Tuesday, August 29, 2017  
Replication or redistribution in whole or in part is expressly prohibited without the prior written consent of GoDubai.com.
Previous Story : Henkel Reports Robust Performance in Q2, Confirms Guidance for Fiscal Year 2017
Next Story : Dubai Land Department reveals the top 10 nationalities that invested in Dubai's real estate market o...
Email this article Print this article

Share this article with your friends and followers
NewsVine

Comments

Back to Top  
Most Viewed Press Release posted in the last 7 days
Mouawad Acquires The 51.38 Carat Dynasty Diamond From ALROSA
Introducing the GUESS Jeans Fall 2018 Collection
Cerruti 1881 MOLVENO timepiece and cufflinks
Build Your Perfect Skincare Routine with Essentials from Glambeaute.com
Hour Choice presents Coach Astor Collection
Nazih Introduces New Dr. Renaud Skincare Range
Carl F. Bucherer Presents Adamavi Collection
Business Wear by Hugo Boss
Head to Modhesh World for Summer Fun Before the School Run
Five Awesome Reasons to Visit LEGOLAND® Dubai During the Eid Al Adha Holiday
The new Rado HyperChrome Chronograph in bronze and high-tech ceramic
Back-to-School Shopping Made Easy with SOUQ.com
Never Run Out of Space for Those Joyful Summer Holiday Memories With Western Digital
Spectacular live entertainment for the entire family at Majid Al Futtaim malls i...
Eid Gift Guide 2018
The Marriott International cyclist team completes 600km R2A cycle challenge
New Addition to the HUAWEI Nova 3 Series: On-trend and fashionable HUAWEI nova 3...
Eberhard & Co. immortalizes a legend
Trend Alert! Clueless About Plaid? kate spade Found Fresh Ways to Showcase the G...
Calligraphy, etching and Palestinian embroidery: Learn it all at Tashkeel this S...
The Moon Collection From Lacoste
OMEGA Showcases its Passion for Golf at the 2018 PGA Championship
‘The Little Things' That Makes Summer All The More Enjoyable
Big Android Breakthrough: Huawei's power packed GPU Turbo upgrade will turn you...
XTouch Announces the Launch of the Robot Family Range of Rugged Mobile Phones
American Eagle Takes It to the Ne(X)t Level With Fall Jeans Campaign
du LaLiga HPC Top Talents Arrive in Spain for 21-day Annual Scouting Camp
Let your kids enjoy some dancing at James & Alex Dance Studios
FREE DANCE WEEK is back at James & Alex Dance Studios
The new Hamilton Khaki Field Mechanical
Why Are Chipmakers Making Smaller and Smaller Processors?
VIP Golf Austin Offers Golf Packages For the Avid Tourist
Raymond Weil unveils a new collaboration with Marshall Amplification
Chronoswiss Limited Edition of Flying Grand Regulator Skeleton
Eyesight restored in a rare case of Optic Neuritis
Aperitivo di Ferragosto
Dubai Tourism Publishes ‘12 Steps Towards Sustainability' Manual to Guide Hotels...
LG to Introduce Advanced Stylers With Ai Voice Recognition and Mirrored Glass De...
Samsung Launches the Galaxy Note9 in the UAE
Free Wellness Workshop to address Physical and Mental health issues
Aster Disaster Support Team mobilized to help Kerala flood victims
Department of Culture and Tourism – Abu Dhabi brings excitement to children at S...
Mohamed Bin Zayed Majlis for Future Generations Announces its Second Edition
Carried out by Kalimat Foundation for Children's Empowerment
Freight Growth Slowdown Continues In June
DXC Technology and Amazon Web Services (AWS) Collaborate to Modernize IT Service...
RERA Partners with CBD to Offer Escrow Services for Owners' Association
Secondary Infertility: A Confusing & Emotional Ride Affecting Millions of Women
Turkish Airlines posted USD 258 million Operating Net Profit in the first half o...
Baroncelli Big Date collection from Mido