 Along with the rest of the world, South Africans have shown an appetite for cryptocurrencies. While the size of the market remains unclear, Coinmarketcap gives a figure of $210 billion for the global market, and approximately R6.5 billion for the South African market.
While the true figures remain unclear, what is clear is that SARS has cryptocurrency trading very much in its sights, says Thomas Lobban, Legal Manager, Cross-Border Taxation at Tax Consulting South Africa. “Bitcoin and other cryptocurrencies have notched up huge gains in past year and more—Bitcoin gained approximately 224% in 2020, for example. Given these returns, it’s unsurprising that South Africans are looking at crypto as an investment opportunity, but few realise the tax implications of such a move,” Mr Lobban says. “As with any other asset class, investors must understand their tax obligations in relation to their crypto investments, and plan accordingly. If they do not, the chances are they could find themselves facing an unwelcome tax bill down the line.” SARS’s interest in the possible tax revenues to be gained from cryptocurrency have certainly been strengthened by this year’s budget, in which Minister Tito Mboweni raised the budget allocation to SARS for the year by R3 billion. High-net-worth individuals, offshore investors and cryptocurrency investors have explicitly been targeted as areas likely to yield much of the extra tax sought to be collected by SARS off the back of this additional budget allocation. However, many taxpayers are oblivious of the fact that trading in cryptocurrency renders them liable for tax or how and when tax is levied on their cryptocurrency gains made. Depending on how and why the trades are conducted, some crypto transactions could be deemed to be capital in nature and thus liable only for capital gains tax—however, other transactions could be deemed to be revenue-earning in nature, and would thus be taxed according to the taxpayer’s normal tax rate as per the tax tables. “Based on our work with clients, it’s clear that a major misconception is that a ‘tax event’ only occurs when the cryptocurrency is withdrawn and converted into legal tender, but that’s not true. If a trade is made between, say, Bitcoin and Ethereum, the notional profits of that transaction would also be taxable,” Mr Lobban says. “While there is as yet no legislation forcing cryptocurrency platforms to report on their clients outside of the general provisions of the relevant tax Acts, such as financial service providers are required to do, the walls are closing in fast.” SARS has already begun asking for information on crypto transactions on audit letters issued to taxpayers, and this means that non-compliant taxpayers will either have to lie (and risk incurring further penalties and back tax later) or reveal their trading history. Not providing accurate answers constitutes a criminal offence, Mr Lobban adds. In addition, SARS is investing heavily in its IT capabilities which will enable it to analyse financial and transaction data more effectively, and identify transactions in and out of crypto platforms. Using foreign bank accounts is not a solution either because South Africa is party to numerous agreements which enable automatic reporting between jurisdictions. “We all create digital tracks in our online activity, and there is really no place to hide, and SARS is definitely adopting a zero-tolerance approach to all tax evasion,” Mr Lobban says. “However, it must also be said that paying one’s tax will not make investing in crypto unprofitable provided one plans properly.” Tax Consulting South Africa will be hosting a seminar on the tax implications of investing in cryptocurrency. The webinar will also cover the common pitfalls and how to avoid them. Register here ENDS MEDIA CONTACT: Rosa-Mari Le Roux, 060 995 6277, rosa-mari@thatpoint.co.za, www.atthatpoint.co.za ABOUT Tax Consulting SA: Tax Consulting SA offers a streamlined service in the calculation and filing of individual income tax returns, provisional income tax returns or any other more complex individual tax relate matters. Our highly qualified team of Tax practitioners are registered with SARS under controlling body of the South African Institute of Tax Practitioners (SAIT). As tax specialists, we remove the burden from clients to keep their tax affairs in good order, achieving optimal tax savings while ensuring full compliance. For more information on Tax Consulting please visit: Website: http://www.taxconsulting.co.za/ LinkedIn: Tax Consulting South Africa Facebook:Tax Consulting South Africa
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 In a COVID-stricken economy, employee motivation and productivity are being hampered by salary cuts and reduced working hours.
“Employers are looking for innovative remuneration solutions that will inspire their workforce while preserving their own constrained finances,” says Tanya Tosen, Master Mobility, Tax and Remuneration Specialist at Tax Consulting South Africa. According to Tosen, there is indeed a strategy that fits the bill in the current economic climate. Remuneration models Generally, three main remuneration approaches are followed in South Africa. The first, being a basic plus benefits structure, is a gamble for most organisations. With a fixed basic salary and variable benefits added over and above, the burden of any increases on these employer contributions following rate changes, mainly falls on the employer. The second structure being the classic cost to company model, pays a fixed total remuneration package, that incorporates both, salary and benefits. Increased contributions to benefits and subsequently the tax impact are then borne by the employee, leaving them at a disadvantage. The recommended strategy to follow, is to implement a cost to company with flexible benefits structure, which strikes a fair balance between the two previous models. Employers enjoy the advantages of a fixed cost to company strategy while employees are able to structure their packages in line with their present needs. This optimal model offers the following key practical benefits:
Conclusion At a time when organisations’ ability to offer more attractive rewards is severely impeded, the cost to company with flexible benefits remuneration pay strategy is fast becoming the go-to remuneration model. “The balanced set of benefits it offers makes it the best strategy for controlling costs while liberating workers to meet their own financial commitments,” says Tosen. ENDS MEDIA CONTACT: Rosa-Mari Le Roux, 060 995 6277, rosa-mari@thatpoint.co.za, www.atthatpoint.co.za ABOUT Tax Consulting SA: Tax Consulting SA offers a streamlined service in the calculation and filing of individual income tax returns, provisional income tax returns or any other more complex individual tax relate matters. Our highly qualified team of Tax practitioners are registered with SARS under controlling body of the South African Institute of Tax Practitioners (SAIT). As tax specialists, we remove the burden from clients to keep their tax affairs in good order, achieving optimal tax savings while ensuring full compliance. For more information on Tax Consulting please visit: Website: http://www.taxconsulting.co.za/ LinkedIn: Tax Consulting South Africa Facebook:Tax Consulting South Africa  If you’re 55 plus and have emigrated or are intending to emigrate, you’ll still have to submit annual returns to SARS and pay tax on your worldwide income for the rest of your life.
“Depending on your situation, you can either reduce or eliminate your tax obligation, but only if you follow the correct processes,” says Melanie Browne, Financial Emigration Application Specialist at Tax Consulting South Africa’s Expatriate Taxation division. In addition, new legislation prohibits you from encashing your retirement annuity until you are able to prove your non-tax residence status to SARS for a consecutive period of three years. This will come as a disappointment to those planning to fund their relocation with this payout. Emigrating later in life People 55 or over usually have mature financial portfolios. Perhaps the kids are out of the house and you’re making that final sprint towards funding your retirement. For you, settling down in another country is best accomplished without getting deep into debt or taking out a big bond on a new home. So any and all cash is welcome. But if you haven’t formally emigrated, SARS will still take its cut of your earnings, even if you already pay tax to a foreign government. Until you do, you will pay tax, you could be double taxed, and you won’t be allowed to draw from your full retirement annuity before maturity. In fact, you will need to wait for maturity to encash the one third lump sum and take out the remaining two thirds by way of a living annuity. Options The level of tax relief you can apply for depends very much on whether you intend to leave South Africa permanently or temporarily. First, for anyone temporarily abroad and who is an employee, the first R1.25 million of their income is exempt from taxation. However, they must submit their annual returns to qualify for this exemption. Business and investment income is not exempt in terms of this particular exemption. Second, those residing in a country with whom South Africa has a dual tax agreement may only end up paying one of the tax authorities. Again, submitting annual returns is a prerequisite. Third, those departing permanently can pursue formal financial emigration with SARS. If they meet the requirements for non-residency for tax purposes and their tax affairs are in order, they can be free of their tax obligation to South Africa in respect of their foreign income and foreign assets. “Apart from a person being able to draw from their RA after three years outside the country, banks continue to monitor the transfer of funds to foreign accounts by those who have not financially emigrated,” says Lovemore Ndlovu, Tax Consulting South Africa’s SARS and Exchange Control Specialist. “It’s important to note that expatriates who have been abroad for several years can backdate their financial emigration application, reducing the RA waiting period by that time,” says Browne. Professional help It’s obvious that the options available and the processes involved are extremely complex. It’s therefore critical that prospective emigrants engage a professional advisor with good experience in expatriate tax matters. They should also be supported by a strong legal function, that is, attorneys who specialise in the legal requirements of expatriate taxation. “Having this level of guidance will help ensure your application is successful and you can live your new life with peace of mind,” says Browne. ENDS MEDIA CONTACT: Rosa-Mari Le Roux, 060 995 6277, rosa-mari@thatpoint.co.za, www.atthatpoint.co.za ABOUT Tax Consulting SA: Tax Consulting SA offers a streamlined service in the calculation and filing of individual income tax returns, provisional income tax returns or any other more complex individual tax relate matters. Our highly qualified team of Tax practitioners are registered with SARS under controlling body of the South African Institute of Tax Practitioners (SAIT). As tax specialists, we remove the burden from clients to keep their tax affairs in good order, achieving optimal tax savings while ensuring full compliance. For more information on Tax Consulting please visit: Website: http://www.taxconsulting.co.za/ LinkedIn: Tax Consulting South Africa Facebook:Tax Consulting South Africa  South Africa has experienced a large brain drain over the past few years with many skilled South Africans emigrating. However leaving South Africa doesn’t mean you can forget your relationship with SARS.
“No matter where you decide to live, you are still obligated to declare your worldwide income every year to SARS and pay tax on it for so long as you have not formalised your non-tax residency with them,” says Reabetswe Moloi, Admitted Attorney at Financial Emigration, a division of Tax Consulting South Africa. In addition, paying tax to a foreign government doesn’t mean you don’t have to settle your SARS bill as well. So you could end up being double taxed. “However, depending on your situation, you can either reduce your tax burden or do away with it completely, provided you act immediately,” advises Moloi. Settling down Most South African emigrants move to a new country with the dream of laying down permanent roots and little thought of one day returning to South Africa. They generally have a more complex portfolio of assets, investments and life responsibilities than younger adults. Mostly, they want to preserve their wealth to ensure a stable and secure future for their family. The last thing they need is a surprise audit letter from SARS, demanding an account of their assets and income. Especially if it comes several years after they’ve settled down. It might seem easy to throw it in the bin and forget it. But, as SARS becomes more technologically advanced and integrated into a global system of information sharing, it’s only a matter of time until the letter in the mail becomes a knock at your door. “It’s far better to get your house in order before that day inevitably arrives,” says Moloi. What you can do Emigrants have several options available to them. These depend largely on their intent and their ability to prove it, that is, whether they mean to depart South Africa permanently or to eventually return. “Never attempt to deceive SARS or your expatriate tax advisor about this because true intentions leave evidence and you will be found out if abusing these provisions,” warns Moloi. The first option is that, by law, the initial R1.25 million of an expatriate’s annual income is exempt from taxation, provided they are employed. Independent contractors and consultants, and those earning income from assets, like rental property or investments abroad, do not qualify for this exemption. It is important, however, that , you submit a tax return for the year of assessment in question in order to claim and benefit from the exemption. The second is that you may qualify to pay tax to only one government, provided your destination country has a double tax agreement signed with South Africa. It is better to make sure of this before emigrating. The third option is formalising your non-tax residency status by way of financial emigration, which allows taxpayers to relieve themselves of their tax burden to SARS in full. This is the most desirable route for anyone intending to remain permanently outside South Africa. However, the process is incredibly complex and needs to be managed carefully to be successful. Knowing the best option for your situation and how to navigate each path correctly requires the assistance of a tax professional who specialises in expatriate tax matters. They should also be backed by a strong legal component, that is, attorneys and tax practitioners who are deeply familiar with intricate tax laws. “Having good legal and technical advice on your side gives you an edge when dealing with SARS,” says Moloi. ENDS MEDIA CONTACT: Rosa-Mari Le Roux, 060 995 6277, rosa-mari@thatpoint.co.za, www.atthatpoint.co.za ABOUT Tax Consulting SA: Tax Consulting SA offers a streamlined service in the calculation and filing of individual income tax returns, provisional income tax returns or any other more complex individual tax relate matters. Our highly qualified team of Tax practitioners are registered with SARS under controlling body of the South African Institute of Tax Practitioners (SAIT). As tax specialists, we remove the burden from clients to keep their tax affairs in good order, achieving optimal tax savings while ensuring full compliance. For more information on Tax Consulting please visit: Website: http://www.taxconsulting.co.za/ LinkedIn: Tax Consulting South Africa Facebook:Tax Consulting South Africa  Authored by: Jean du Toit, Head of Tax Technical & Reabetswe Moloi, Admitted Attorney at Tax Consulting South Africa
South Africans emigrating to greener pastures may be prevented from leaving the country - or worse - if their application for tax clearance is denied by SARS. Recent changes to expatriate tax procedures and SARS’ dramatically improved auditing capabilities mean the exit process is more stringent than ever. So, taxpayers must ensure they are fully compliant before embarking on it. Worldwide taxation Local tax laws require every South African to declare and pay taxes on their worldwide income, even if they moved to another country years ago. SARS does not tax the first R1.25 million of these earning. However, financial emigration provides a legal escape from this obligation. That said, this method should never be pursued without the guidance of a reputable expatriate tax specialist. Above all, never try to skip the country without completing this process because SARS can use new international information sharing agreements it has with other jurisdictions to track you down anywhere you go. SARS’ capabilities Financial emigration was previously a two-step process involving both SARS and the Reserve Bank. From 1 March 2021, SARS became its sole custodian and its focus has been on ensuring emigrants cannot depart until their taxes are paid-up. SARS has been investing heavily in technologies like AI and data analytics, as well as integration with third-party databases, like the deeds office and financial institutes. This allows them to compare taxpayer declarations with their actual sources of income, asset holdings and investments. We’ve begun seeing more in-depth audits that highlight and question disagreements between SARS’ records and those of third parties, and demand that the taxpayer submits explanations with supporting documents as to why these exist. In addition, SARS used to breeze over trusts. These days, it will request its assets and liabilities statements, list of shareholders and disclosure of any offshore assets it may have. It is therefore essential that every piece of information submitted to SARS contributes to a true and accurate record of the taxpayer's position as a whole. Threats With SARS’ enhanced auditing and data gathering capabilities, emigrants face threats that could delay and even abort their plans for a new life. First, anyone whose tax affairs are not in order will be exposed. It is imperative that they review their compliance in advance and resolve issues before applying for clearance. Previously, those who were wilfully non-compliant in their tax submissions could be prosecuted. A change to law in January 2021 now allows SARS to similarly charge those who are non-compliant simply because of negligence. A taxpayer who cannot explain each and every discrepancy in their exit audit may therefore find themselves in court. Further, if they do not respond to SARS’ request for additional information when applying for clearance, they can be charged for wilful non-compliance as well. Future uncertain A rocky exit process is best avoided as it can derail relocation plans that are typically time-sensitive. Keeping an overseas employer waiting while you sort out your taxes leaves a poor first impression. A delayed departure can run up costs like temporary accommodation, storage of household assets and cancelled flights. Worst of all, prosecution resulting in a criminal record could make a once welcoming destination near impossible to set foot in. Becoming compliant by addressing any past indiscretions and settling outstanding taxes is always preferable to seeing one's dreams disappear on the horizon. It's also the outcome favoured most by SARS. Advice Financial emigration remains the cleanest and only legal way to relocate abroad permanently without future tax obligations, but it’s a complex journey, even for the compliant taxpayer. While any tax consultant can complete your annual returns for you, it's best not to take chances when emigrating. There are too many fly-by-night operators who won't stick around long enough to share your regret when you receive an unexpected SARS audit notice years from now. Always approach an experienced advisor that specialises in expatriate tax and offers a strong legal component. In other words, they are backed by in-house tax attorneys who will represent you in court if the need arises. Under no circumstances hide information about your income, assets or investments from your expatriate tax advisor. SARS will come across it when you make your application so, at the end of the day, you are only doing yourself a disservice. With all your information at their disposal, your advisor will be in a better position to help you. They can offer comprehensive planning and determine the best options for your needs. It may just be a piece of paper but a tax clearance certificate is the real ticket out of South Africa. And the only way to buy one is to be fully tax compliant. ENDS MEDIA CONTACT: Rosa-Mari Le Roux, 060 995 6277, rosa-mari@thatpoint.co.za, www.atthatpoint.co.za ABOUT Tax Consulting SA: Tax Consulting SA offers a streamlined service in the calculation and filing of individual income tax returns, provisional income tax returns or any other more complex individual tax relate matters. Our highly qualified team of Tax practitioners are registered with SARS under controlling body of the South African Institute of Tax Practitioners (SAIT). As tax specialists, we remove the burden from clients to keep their tax affairs in good order, achieving optimal tax savings while ensuring full compliance. For more information on Tax Consulting please visit: Website: http://www.taxconsulting.co.za LinkedIn: Tax Consulting South Africa Facebook: Tax Consulting South Africa  Xpatweb has released its 2020/21 Critical Skills Survey Report. “The report data is most used by stakeholders who influence policies around critical skills and the import of foreign professionals,” says Marisa Jacobs, the firm’s MD.
The Top 10 Survey participants indicated the following skills as most in demand but hardest to source locally: engineers (18%); ICT specialists (13%); foreign language speakers (10%); media and marketing specialists (9%); artisans (8%); C-suite executives (7%); senior financial executives (6%); healthcare specialists (5%); science professionals (4%); accounting professionals (1%). Of note is the increasing urgency for media and marketing specialists, which Jacobs says is probably due to digital advances, the social media marketing explosion, and the growing sophistication of the marketing profession itself. Respondents are also concerned that the exclusion of Corporate General Manager from the National Critical Skills List will impact their search for executives with international experience. “We anticipated the term would be replaced with specific titles, like CEO or CFO, to avoid abuse but, so far, this does not appear to be the case,” says Jacobs. Even if their title does not appear on the Critical Skills List, organisations can still bring in foreign executives. Yet, the process involved is much longer and may cause C-suite candidates to favour offers in other regions where painless migration is assured. Business impact 77% of organisations reported that they struggle to source critical skills in South Africa for local and cross-border operations. 76% asserted that an international search will help them satisfy their objectives. 92% indicated that missing critical skills have an impact on stakeholders within their organisation. The gaps are typically associated with the top ten critical skills above. Skills transfer and succession planning South African employers are sometimes accused of overlooking local talent in favour of foreign professionals. However, 81% of respondents view succession planning and skills transfer as a priority for their business. “Many organisations have exited their foreign nationals after successfully transferring their competencies and responsibilities to local employees,” reports Jacobs. Unfortunately, the demand typically outstrips the pace of transfer. Experience and education Although demand is high, employers cannot risk the integrity of their operations by hiring inexperienced employees. 38 percent require three to five years experience while 28 percent demand over five years. Similarly, 49% seek an undergraduate degree and 23% desire a postgraduate or honours degree. Professional bodies Foreign employees entering South Africa on a critical skills visa must first be registered with a local professional body representing their industry. 21% of respondents find the registration process of professional bodies onerous when applying for such a visa. “While many bodies enable the efficient entry of foreign talent, others need to review their requirements and processes to ease entry while maintaining their professional standards,” suggests Jacobs. Valuable data Xpatweb was the only private sector organisation invited to present its 2019 survey findings before the Departments compiling the new National Critical Skills List. “We believe this speaks to the quality of our data, the integrity of our research methodology and the utility of the survey report,” says Jacobs. The Xpatweb 2020/21 Critical Skills Survey Report is freely available for download from the company’s website, after registration. ENDS MEDIA CONTACT: Rosa-Mari Le Roux, 060 995 6277, rosa-mari@thatpoint.co.za, www.atthatpoint.co.za ABOUT Xpatweb: HOLISTIC EXPATRIATE SOLUTIONS The Xpatweb group has been in existence for over 15 years and includes over 100 professionals, including immigration specialists, mobility practitioners, tax practitioners, attorneys, and chartered accountants. They offer holistic, client-centric, and fully compliant expatriate and work visa solutions. Clients can expect an exceptional end-to-end service that starts with an initial technical meeting to discuss any past challenges, a recommended optimal solution, and the creation of a roadmap and protocol for service delivery. They also offer an on-premises immigration audit service to confirm expatriate employees hold legally obtained, valid visas, and that their duties align with their visa conditions. In addition, their unique online immigration tracking system helps you to easily manage and track expatriate assignees across the globe, is fully customisable and dashboard-driven, and provides a secure repository for storing assignees’ documents. For more information on Xpatweb please visit: Website: http://www.xpatweb.com/ LinkedIn: https://www.linkedin.com/company/work-permit-south-africa/ Facebook:https://www.facebook.com/xpatweb/  Xpatweb’s Critical Skills Survey 2020/21 highlights the most in demand scarce skills the country is facing, which has led to businesses seeking to recruit talent from across the globe. Xpatweb’s annual survey has fast become known as a benchmark for business and policy makers. Input from the 2019 research findings was submitted for consideration when the drafting the latest OIHD critical skills shortage list. The survey was conducted across a wide range of multi-national and corporate firms to assess the level of difficulty organisations face when sourcing scarce skilled individuals and the role of foreign nationals in addressing these shortages. The number of respondents has grown exponentially in recent years, with a 30% increase in responses from 178 in 2019, to 220 in 2020/21. Xpatweb managing director Marisa Jacobs highlighted the results of the latest Xpatweb Critical Skills Survey 2020/21. “The survey has revealed that 77% of organisations have stated that they are still struggling to recruit and obtain critical skills in South Africa for their local and cross-border operations. 76% of participants further confirmed that an international search will assist the organisation in meeting its business objectives,” Jacobs said. Top 10 most in demand skills According to the latest survey, the top ten skills businesses are struggling to recruit include Engineers (18%), ICT (13%); Foreign language speakers (10%); Media and Marketing Specialists (9%); Artisans (8%); C-Suite Executives (7%); Senior Financial Executives (6%); Health Professions and Related Clinical Sciences (5%); Science Professionals (4%) and Accounting (1%). Over the past five years, the skills shortage has persisted with eight categories of skills dominating the top of the list of professionals that businesses find difficult to recruit. “This has led to many organisations seeking suitably qualified and experienced candidates beyond South Africa’s borders to fill these posts” Jacobs said. ICT professionals and Engineers in highest demand The number of businesses indicating that engineers are difficult to recruit rose from 16% to 18% which could indicate that these skills are being lost to the brain drain as countries like Australia and the United Kingdom compete directly with South Africa for qualified and experienced professionals. Business expansions into Africa for special projects locally in the oil and gas sectors also tend to attract these in demand skills. Mechanical engineers (26%) were most in demand, followed by maintenance engineers (18%), chemical engineers (13%) and industrial engineers (14%). The demand for ICT skills remains unprecedented and, on the rise, as 14% of businesses, compared to 15% of respondents in the 2019 survey now indicate that they struggle to source skilled professionals in this field to drive their operational demand to transition into the digital economy. Professionals most sought after included IT application developers (11%), data analysts (10%), data scientists (9%), software developers (9%) and software engineers (8%). “As big data, robotics, artificial intelligence, machine learning and the internet of things rapidly shape the way of doing business, which often marks the difference between firms that survive and thrive in the transition from the third industrial revolution into the 4IR and those that don’t compete effectively, sourcing these skills is a priority that cuts across all sectors,” Jacobs noted. Cross border trade growth spurs demand for C-Suit executives and foreign language speakers Senior Financial and C-Suite Executives remain in demand with the number organisations reporting that it is a struggle to find suitable candidates to fill these key business leadership positions. Most in demand professions were Chief Operating Officer (24%), Chief Financial Officer (24%), Chief Executive Officer (19%) and Chief Technology Officer (19%). These skills are most sought after in sectors including business and finance; production and manufacturing; management; information communication; IT and technical services, mining and administrative services. “Factors influencing the challenges that businesses face in recruiting the right person for these roles include the fact that in a global village, organisations are increasingly seeking professionals with international experience. Businesses are not only seeking essential tick box qualifications and experience required for a traditional executive position, but they want professionals who are equipped with niche business experience to lead their expansion and growth across international markets,” Jacobs explained “Businesses are aware of market dynamics in their various global markets and need to be certain that candidates understand the nuances of their specific focus areas,” Jacobs added. This global expansion of businesses and especially growth in cross-border trade on the African continent has also led to rising demand for foreign language skilled professionals, including the hiring of interpreters. Some 10% of organisations indicated that they struggle to find people with adequate foreign language skills, a marked increase from just 4% in the 2019 survey. Foreign language speakers most in demand included, French (29%), German (18%), Mandarin (14%); Italian (10%), Spanish (10%) and Dutch (4%). Sectors that are finding a demand for these skills are largely information technology and communication; business and finance; hospitality and tourism and education and libraries. Global competition for skills The survey findings reveal that South Africa continues to compete on a global stage for critical skills. The United States, Australia, and the United Kingdom’s critical skills shortage lists virtually mirror the skills that SA is desperate to attracted as highlighted in the 2020/21 Critical Skills survey - from ICT and C-Suite Executives to Engineers, the country’s need to fill posts in these fields to grow their economies. “SA has to compete more than ever with the likes of the US, Australia and the UK when considering its strategy to recruit skilled professionals. SA policy makers therefore need to consider how to make it as easy as possible for skilled professionals to gain access to work and business opportunities locally,” Jacobs advised. “Fortunately, the SA government is serious about this and has updated the critical skills list to stay in touch with the needs of the local economy. The critical skills list makes it possible for businesses to embark on recruitment drives to source these skilled professionals abroad which makes it important for organisations to take advantage of the opportunity to comment on the new list before the deadline,” Jacobs concluded. Many of the skills on this new survey echo the new Occupation in High Demand (OIHD) list which served as the basis for the updated Critical Skills List (CSL) released Minister of the Department of Home Affairs, Dr Aaron Motsoaledi last month for public comment by 31 March 2021. The CSL represents the latest list of skills deemed in short supply in SA and who may apply for a work visa in terms of the Critical Skills Visa category under the Immigration Act. For access to the full 2020/21 Critical skills survey results, please visit www.xpatweb.com. ENDS MEDIA CONTACT: Rosa-Mari Le Roux, 060 995 6277, rosa-mari@thatpoint.co.za, www.atthatpoint.co.za ABOUT Xpatweb: HOLISTIC EXPATRIATE SOLUTIONS The Xpatweb group has been in existence for over 15 years and includes over 100 professionals, including immigration specialists, mobility practitioners, tax practitioners, attorneys, and chartered accountants. They offer holistic, client-centric, and fully compliant expatriate and work visa solutions. Clients can expect an exceptional end-to-end service that starts with an initial technical meeting to discuss any past challenges, a recommended optimal solution, and the creation of a roadmap and protocol for service delivery. They also offer an on-premises immigration audit service to confirm expatriate employees hold legally obtained, valid visas, and that their duties align with their visa conditions. In addition, their unique online immigration tracking system helps you to easily manage and track expatriate assignees across the globe, is fully customisable and dashboard-driven, and provides a secure repository for storing assignees’ documents. For more information on Xpatweb please visit: Website: http://www.xpatweb.com/ LinkedIn: https://www.linkedin.com/company/work-permit-south-africa/ Facebook:https://www.facebook.com/xpatweb/   Authored by: Jean Du Toit, Head of Tax Technical at Tax Consulting South Africa
SARS has taken a critical step in rebuilding the revenue authority by launching a massive recruitment drive. SARS is looking to appoint 370 experienced and highly skilled individuals, as well as 200 legal, accounting and other graduates in the fields of tax, customs and auditing. These additional resources will enable SARS to fulfil its promise to crack down on the wealthy and to criminally prosecute delinquent taxpayers. Words into action This announcement marks two years to the day since National Treasury announced that Mr Kieswetter will take over the reins at SARS on 1 May 2019. Since then, we have heard of several initiatives to rebuild SARS, specifically directed at enforcement. But the elephant in the room has always been SARS’ ability to follow through on its strategic objectives, given its capacity issues. However, with an additional budget of R3 billion, SARS has taken a critical step in achieving its objectives; a drive to replenish the resources lost under the previous administration. With this move we can now expect to see SARS’ initiatives being implemented. Wealthy taxpayers no. 1 on SARS’ list The Minister of Finance made it clear as day that enforcement among wealthy taxpayers will be central to SARS’ strategy in coming months. It is reported that several individuals have already been identified for investigation and will receive notices in April 2021. Those who remain sceptical about SARS’ ability to do so should have a closer look at the recruitment list. Among the experienced hires, SARS is looking to employ a Director of High Net Worth Individuals, who will be complimented by specialist investigative auditors that will be appointed to focus on this segment of the tax base. The once far off idea of lifestyle audits, detection of offshore assets and the untangling of complex trust structures is now a reality. The window of opportunity for these individuals to apply for voluntary disclosure relief (VDP) is closing rapidly. Criminal prosecution More importantly, the recruitment list has a strong message for the entire tax base – the appointment of criminal investigators. Most should know by now that the bar for criminal prosecution of tax offences has been lowered. SARS and the NPA pushed for this law change specifically because they found it too difficult to prosecute taxpayers for minor tax offences. With the promulgation of the tax Bills in January, SARS and the NPA no longer need to prove that you had the intention to be non-compliant; you can be held criminally liable if you negligently fail to meet your tax obligations. The transgressions that could mean a potential prison sentence include failing to update your registered details, not responding to requests for information and not retaining documentary records. The recruitment list reveals, unsurprisingly, that SARS intends to make use of this law change, to enhance its deterrence factor. The higher purpose The recruitment release, titled “SARS – A future reimagined”, on the one hand sends a very positive message to taxpayers – government is committed to restore SARS to the revered institution it once was, where SARS officials were motivated by SARS’ “higher purpose” to serve the people, a mantra instilled by the first Commissioner for SARS, Mr Pravin Gordhan. On the other hand, it serves as a cautionary notice to those who have succumbed to the decline in taxpayer morality – non-compliance will no longer go undetected, and it will be costly. If you have treated SARS with contempt you should perhaps see this announcement as their final warning to speak to them via the VDP, before they speak to you. ENDS MEDIA CONTACT: Rosa-Mari Le Roux, 060 995 6277, rosa-mari@thatpoint.co.za, www.atthatpoint.co.za ABOUT Tax Consulting SA: Tax Consulting SA offers a streamlined service in the calculation and filing of individual income tax returns, provisional income tax returns or any other more complex individual tax relate matters. Our highly qualified team of Tax practitioners are registered with SARS under controlling body of the South African Institute of Tax Practitioners (SAIT). As tax specialists, we remove the burden from clients to keep their tax affairs in good order, achieving optimal tax savings while ensuring full compliance. For more information on Tax Consulting please visit: Website: http://www.taxconsulting.co.za/ LinkedIn: Tax Consulting South Africa Facebook:Tax Consulting South Africa  The process of financial emigration, which is the process that allows a taxpayer to formally place themselves on record as a non-resident for tax purposes with the South African Revenue Service (SARS), recently changed and came into effect on 1 March 2021.
Jonty Leon, Legal Manager (Expatriate Tax) at Tax Consulting South Africa, says the company has seen an increased volume of inquiries regarding the benefits of financial emigration, the new process, as well as the timelines involved in financial emigration. “The advantage of financial emigration is that it allows you to cleanly cease tax residency of SA, ensuring your foreign income and foreign assets are ring-fenced outside of SARS’ jurisdiction. Financial emigration used to be a tax and exchange control process, but the new process means that financial emigration has become solely a tax process. The exchange control process created an additional set of administrative challenges with financial institutions, which is no longer the case. Under the new financial emigration regime, there are no disadvantages for those who intend to reside outside of the country permanently,” says Leon. In-depth audits and proving non-residency As SARS will no longer be able to tax an individual on their worldwide income and assets once they have ceased tax residency of SA, the institution has ramped up its collection power to ensure the taxpayer has truly met the requirements to cease tax residency. This translates to more in-depth audits from SARS to ensure these taxpayers meet the criteria of non-residency. “For many years, South Africans abroad have flown under the radar. Many expats are still of the opinion that they are no longer liable to pay tax in South Africa if they have been abroad for many years. It is important to note that the process is not automatic, and the burden of proof always lies with the taxpayer. SARS now has a team dedicated to investigating and recovering tax from South Africans abroad who have not ceased their tax residency in South Africa,” says Leon. Steps involved in financial emigration The individual seeking financial emigration must be entirely up to date and compliant with SARS. This compliance extends to any South African trusts or companies that they are linked to, which must also be fully up to date and compliant. The taxpayer must then pass two tests to determine tax residency outside of South Africa, namely the Physical Presence test and the Ordinarily Resident test. After this, they can submit an application with full supporting documentation to SARS for an Emigration Tax Clearance Certificate. The application will include an “exit tax” that is calculated on certain worldwide assets as well as a declaration of all South African assets and liabilities. Only once this has been audited and approved by SARS can the taxpayer consider themselves a non-resident for tax purposes. Leon concludes by advising people to partner with a reputable tax advisory firm with experienced, admitted attorneys in their team. “Taxpayers must follow the most transparent, formal route to financially emigrate to ensure a taxpayer can overcome their burden of proof when ceasing tax residency.” ENDS MEDIA CONTACT: Rosa-Mari Le Roux, 060 995 6277, rosa-mari@thatpoint.co.za, www.atthatpoint.co.za ABOUT Tax Consulting SA: Tax Consulting SA offers a streamlined service in the calculation and filing of individual income tax returns, provisional income tax returns or any other more complex individual tax relate matters. Our highly qualified team of Tax practitioners are registered with SARS under controlling body of the South African Institute of Tax Practitioners (SAIT). As tax specialists, we remove the burden from clients to keep their tax affairs in good order, achieving optimal tax savings while ensuring full compliance. For more information on Tax Consulting please visit: Website: http://www.taxconsulting.co.za/ LinkedIn: Tax Consulting South Africa Facebook:Tax Consulting South Africa  Employers whose business depends on imported engineering skills must submit their comments on the new draft Critical Skills List no later than 16h00 on 31st March 2021.
So says Marisa Jacobs, MD of Xpatweb, the only private company invited to participate in the development of the proposed List. “Holders of critical skills visas based on the previous CSL will be unable to renew them if their skill is discarded from the new list, and their organisations will be required to follow are more lightly visa process where the resource is required beyond their current visa validity period,” she says. “The Covid pandemic has in a number of cases impacted projects which will mean that resources may be required beyond the initial assignment period,” Jacobs adds. While certain engineering roles appear on the list, others in high demand have not been included. Scarce engineering skills Industry experts agree that various engineering skills are in short supply locally, often in specialised fields. Sumaya Hoosen, Human Capital & Skills Development Executive at the Steel and Engineering Industries Federation of Southern Africa (SEIFSA), says absent from the List are mechanical and electrical design engineers, quality systems engineers, robotics and production engineers, and production and process control engineers and technologists. “At an intermediate level, specialist technicians across several disciplines remain in short or critically scarce supply,” she says. These include lift; heating, ventilation and air conditioning, and generator repairs; non-destructive testing; and process control technicians, as well as additive manufacturing technologists, environmental specialists, and supply and distribution specialists. Millicent Kabwe, acting Executive: Strategic Services at the Engineering Council of South Africa points out that while the List is generally comprehensive, specialisations cannot be overlooked. “ECSA accreditation clearly states that professionals can only practice in their field of competence,” she says. Civil engineers, for example, can specialise in roads, traffic and transportation, hydraulics, water and sanitation, structural or geological disciplines. Experts in one area are not considered competent in another. Kabwe also notes that chemical engineers and refrigeration and air conditioning artisans have been neglected. Interestingly, Xpatweb’s survey data echoes this sentiment showing that 13% of respondents who struggle to recruit engineers, also say that chemical engineers are in high demand. “The state of the Chemical Industry in South Africa has not shown any significant growth in the last decade,” she says. In addition, Kabwe says that a number of roles in the automation instrumentation mechatronics field should have been included in the draft List. “The fact that mechatronics technician was the only mechatronics professional identified shows that the current List is only concerned with maintaining equipment from international suppliers and not developing new technologies,” she observes. Hoosen agrees. “The List is not progressive enough to regard technological developments in the industry,” she says. Xpatweb’s latest survey reveals that shortages occur predominantly in production and manufacturing, architecture, mining, education and libraries, and healthcare. In these arenas, the specific engineering roles were mechanical, maintenance, chemical, mining, industrial, nuclear and automation engineers. “Preliminary results show that 18% of participants struggle to recruit engineers,” reports Jacobs. At the same time, 97% of respondents with an engineering skills shortage indicate that ongoing access to these skills is vital to their business’s continued operational success. Education and experience Although engineering graduates are available in South Africa, employers seek both good education and ample experience to protect the integrity of their projects. Xpatweb’s survey data shows that 40% of respondents require their engineers to hold an advanced diploma-level education, whereas 12% demand a Master’s degree. 13% require one to three years experience, 37% want three to five years experience, and 46% need five years or more experience. Succession planning and skills transfer Encouragingly, 81% of survey participants indicated that using expatriate professionals to facilitate succession planning and skills transfer is a top priority for their business. “Companies actually prefer local engineers but need employees with the right experience,” says Jacobs. “Hiring expatriates provides mentoring opportunities while meeting that condition.” Hoosen states that the most important benefit of hiring foreign engineers needs to be in the development of local competence and expertise in these much needed disciplines. Kabwe believes that the transfer of skills and knowledge to the country will lead to increased innovation, as well as other economic advantages, like keeping talent, business and taxes inside South Africa. Taking action With only a few days left to make their needs heard, Jacobs urges employers to submit their comments on the draft Critical Skills List. “After the deadline, the chances of recruiting foreign engineering roles not on the finalised List will drop dramatically,” she warns. Jacobs also encourages employers to take Xpatweb’s Critical Skills Survey. “The fact that our data was used in developing the draft CSL is a testament to the quality of our research methodology, which promises invaluable insights to expatriate employers,” she says. ENDS MEDIA CONTACT: Rosa-Mari Le Roux, 060 995 6277, rosa-mari@thatpoint.co.za, www.atthatpoint.co.za ABOUT Xpatweb: HOLISTIC EXPATRIATE SOLUTIONS The Xpatweb group has been in existence for over 15 years and includes over 100 professionals, including immigration specialists, mobility practitioners, tax practitioners, attorneys, and chartered accountants. They offer holistic, client-centric, and fully compliant expatriate and work visa solutions. Clients can expect an exceptional end-to-end service that starts with an initial technical meeting to discuss any past challenges, a recommended optimal solution, and the creation of a roadmap and protocol for service delivery. They also offer an on-premises immigration audit service to confirm expatriate employees hold legally obtained, valid visas, and that their duties align with their visa conditions. In addition, their unique online immigration tracking system helps you to easily manage and track expatriate assignees across the globe, is fully customisable and dashboard-driven, and provides a secure repository for storing assignees’ documents. For more information on Xpatweb please visit: Website: http://www.xpatweb.com/ LinkedIn: https://www.linkedin.com/company/work-permit-south-africa/ Facebook:https://www.facebook.com/xpatweb/ |
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