The South African government has tabled a tax relief meaure that would benefit expats stuck in the country during lockdown, while passing a bill that would potentially make it more difficult for them to access their pension funds until three years after they emigrate.

South African expats earning up to ZAR1.25m (£61,000, $81,000, €68,000) through foreign employment need to spend at least 183 days out of the country during a 12-month period, of which 60 days must be continuous, to be eligible for the tax exemption.

But travel bans meant that some may have not been able to comply, putting them at risk of a massive tax liability. As a result, the Treasury and South Africa Revenue Service (Sars) proposed that the 66-day lockdown period between 27 March and 31 May 2020 be subtracted from the 183-day requirements.

This means that, if an expat spent more than 117 day outside the country, they may still qualify for the exemption. Good news Rex Cowley, director at Overseas Trust & Pension, told International Adviser: “The proposed relief to South African expats who are migrant workers but resident in South Africa for tax, and benefit from the Foreign Employment Exemption, is clearly welcomed.

“This amends the emergency measures introduced by the ‘covid-19 tax relief bills’. “The reliefs and proactive stance clearly show the South African government is serious about looking after their expats, but it would have been ideal if the requirement for the ‘60 continuous days’ to have been reduced by the same factor as days required to be physically abroad.”

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