Filing US expatriate tax returns for American Expats South Africa

By Expat News

South Africa has been famous among expats from different parts of the world for its sun, beaches, wildlife and clear skies. Johannesburg and Cape Town have the largest concentration of expats. US expats South Africa must know that they have to file American tax return on overseas taxes whether they live in Soweto or New York. Therefore, it is essential to understand the South African tax system and how it affects US expatriate tax returns.

We get a lot of questions from expats South Africa. What are foreign income tax rates in South Africa? Who is required to file a tax return in South Africa? Do you offer US expatriate tax services for American expats South Africa? The purpose of this article is to cover the most popular questions.

Expatriate Tax Rules and Returns for Expats South Africa

US citizens are required to report their worldwide income and to file expatriate tax returns if they meet the requirements. Green card holders are subject to green card tax reporting too. Consequently, Americans in South Africa are required to report the US income and South African income.

However, there are 3 IRC Code provisions to eliminate double taxation.

  • Foreign income exclusion. American expats South Africa can exclude up to $101,300 in 2016 on expatriate tax returns if they meet a physical presence test or bona fide residence test.
  • Foreign housing exclusion. American expats South Africa can exclude foreign housing expenses in addition to taking foreign income exclusion.
  • Foreign tax credit. American expats South Africa can deduct foreign income taxes or take a credit on US expat tax return.

American expats South Africa may be required to file the FBARs and to report foreign financial accounts with an aggregate value over $10,000.

Tax system in South Africa – FAQ

I am an American expat residing in South Africa. Is my worldwide income taxed in South Africa?

Expats South Africa are taxed on their worldwide income if they are considered residents for tax purposes. Non-residents are taxed only on the South African source income whether it is actual or deemed source.

Who is considered a tax resident in South Africa?

Two tests are considered to determine whether a taxpayer is a resident of South Africa.

Test 1. The ordinary residence of a taxpayer is used to define a residency. For example, natural persons who are ordinarily residents (the location of their real home) will be viewed as residents of South Africa.

Test 2. The taxpayers who are not ordinary residents are considered residents if the following conditions are met:

  • A taxpayer was physically present for more than 91 days in total in the year of assessment.
  • A taxpayer was physically present for more than 91 days in total during each of the five years of assessment prior to the year of assessment.
  • A taxpayer was physically present for more than 915 days in total during the five preceding years of assessment.

What is the tax year in South Africa?

South Africa has a tax year from 1 March to 28/29 February. Per the IRS the USA has a calendar tax year.

What is an income tax rate in South Africa?

The income tax rates in 2012 are 18% to 40%. South Africa does not have social security taxes, although, employees and employers are required to make contributions to the State Unemployment Insurance Fund.

Which income is considered a taxable income in South Africa?

Most types of remuneration and benefits are taxable in South Africa. For example, salary, wages, accommodation, cost-of-living allowance and multiple benefits in kind.

Can expats South Africa file a tax return with a spouse?

Spouses must file separate tax returns.

Is it a requirement to file a South African tax return and pay overseas taxes every year?

Most tax returns in South Africa must be filed by November 22 in case of the manual submission. Electronic submission due date for non-provisional taxpayers is November 22. Electronic submission deadline for provisional taxpayers is January 31.

Does South Africa have a tax treaty and social security agreement with the USA?

A double tax treaty was signed in 1997 between the USA and South Africa. Currently the USA does not have a totalization agreement with South Africa. It means that some US expats might be required to pay into US social security even if they work in South Africa. Moreover, South Africa is determined to sign the USA-South Africa FATCA agreement soon. It will affect US expats and the disclosure requirements.


Expats who plan to move and to live in South Africa should review the treaty provisions and the latest IRS updates.

Expats with additional questions about US expatriate tax preparation, FATCA, FBARs, PFIC or any other overseas tax issues, please seek help of an expatriate tax CPA who has helped expats in South Africa. International tax experts at Artio Partners with be pleased with various tax issues for expats.