International comparison
As a comparison, in its presentation the Treasury provided a breakdown of the tax treatment South Africans face in some of the most popular expat destinations.
Between 2006 and 2016, when South Africans chose to emigrate 26% went to Australia, 25% to the UK, and 13.4% to the US.
In Australia, for example, tax residents are taxed on their worldwide income, including their foreign employment income.
In the UK, residents pay tax on all their income and individuals are automatically considered tax resident if they have spent 183 days or more in the country in a particular tax year.
In the US, citizens or resident aliens of the US who live abroad are taxed on their worldwide income. This, however, is related to citizenship and not tax residency.
No or low-tax jurisdictions
The proposed scrapping of the tax exemption has prompted outrage from South African expats and overseas workers who live in low or no-tax jurisdictions.
Action groups have sprung up around the world, with one led by Abu Dhabi-based Barry Pretorius launching a petition to stop the changes from coming into effect.
South Africans living in no tax jurisdictions, such as the UAE, are expected to be among the hardest hit as tax credits will not be available for higher costs of living or other taxes, such as the region’s soon-to-be-introduced VAT.
