Week 3 - Residence

Question 1

resident vs non-res taxation?

Answer 1

resident = worldwide
non-res = SA source income

Question 2

when is a natural person resident?

Answer 2

if they are:

• ordinarily resident in SA or
• if they meet the physical presence test

Question 3

when is an individual ordinarily resident?

Answer 3

• where they return after their wanderings
• habitually and normally resident in SA
• can only be OR in one country at a time

Question 4

applying both OR and PPT test?

Answer 4

cannot be done in the same year

can change in next YOA

Question 5

question format for residency?

Answer 5

IPAC

Question 6

requirements in the PPT?

Answer 6

must meet all three:

• 91+ days in current year
• 91+ days in each preceding 5 years
• 915+ in aggregate in preceding 5 years

Question 7

what does PPT say about absences?

Answer 7

if absent for at least 330 continuous days, residency ceases on date of leaving country

Question 8

residence for non-natural persons?

Answer 8

must be:
- inc, est, formed in SA
or
- has an effective place of mgmt in SA

Question 9

what is an effective place of mgmt?

Answer 9

where key mgmt and commercial decisions that are necessary for company conduct are made

Question 10

double tax agreement?

Answer 10

• a person cannot be taxed twice if they are a resident in two countries.
• if it specifies that someone is a resident in another country, they will not be an SA resident

Question 11

who do source rules apply to?

Answer 11

non-residents

Question 12

which income streams do source rules apply to?

Answer 12

• divs
• royalties
• interest
• public office
• services rendered in public sector
• lump sum, pension, annuities
• special knowledge

Question 13

source rules for special knowledge/info?

Answer 13

• amt received must be incurred/paid by a SA resident, unless it is attributable to a private establishment outside SA (and/or)
• info is used in SA

Question 14

source rules for dividends?

Answer 14

company it is rec from must be an SA resident company. total amt included into gross income but receiver can apply for divs withholding tax deduction to avoid double taxation

Question 15

source rules for interest?

Answer 15

• int is paid/incurred by a SA resident (or)

- funds are used/applied in SA

Question 16

source rules for royalties?

Answer 16

• int is paid/incurred by a SA resident (or)

- funds are used/applied in SA

Question 17

source rules for public office?

Answer 17

all amounts received from a person holding public office in SA will be SA source

Question 18

source rules for services rendered?

Answer 18

all amounts rec/acc to a person relating to services rendered on behalf of any listed employer in the public sector will be SA source (regardless of where service is performed)

Question 19

source rules for pensions/annuities?

Answer 19

• if pension/annuity is in respect of services rendered within SA
• if partly outside SA = only portion relating to services rendered within SA is SA income

Question 20

source rules for disposal of immovable property?

Answer 20

immovable property must be situated in SA

Question 21

source rules for disposal of movable property?

Answer 21

• purchaser = SA resident (and)
• proceeds from disposal not taxed by any country other than SA
• not attributable to priv est outside RSA

Question 22

source rules for movable property purchased by non-res?

Answer 22

will an SA source if asset is attributable to priv est in SA

Question 23

purpose of Section 9(4)?

Answer 23

confirms that an amount is not from an SA source if does not meet rules in section 9(2)

Question 24

items incl in s9(4)?

Answer 24

• foreign dividend
• royalty/interest not from SA
• disposal of asset not from source within SA