Foreign SARS Codes (South Africa) Infotype (0725) 

Definition

As of the tax year 2003 and onwards, South African residents are taxed on their remuneration earned outside of South Africa, irrespective of whether they work for a local or foreign employer. Therefore, separate IRP5 or IT3(a) certificates have to be issued to an employee, if their remuneration consists of local and foreign remuneration for specified periods during a tax year.

 

Integration

 

For each of your employees with foreign income, you must first perform the following prerequisites before creating a Foreign SARS Codes (South Africa) (0725) infotype record:

·         On the infotype Taxes SA (0149), set the indicator in the field Foreign income period, if the employee (a South African resident) earns income from outside of South Africa in the tax period in question. Setting this indicator will then map the foreign earnings of the employee to the corresponding SARS code (within a foreign income period).

·         Delimit the income infotypes Basic Pay (0008), Recur. Payments/Deds. (0014), and Additional Payments (0015) and, if appropriate other infotypes (for example, Social Insurance (0150)) for the foreign income period. Note: If any taxable earnings are calculated during payroll (earned in South Africa) while the foreign income flag is set, the employee’s payroll run will be rejected.

·         If you are reporting foreign currency in the original currency, ensure that the currency has been maintained in the currency table (V_TCURR).

If an employee earns foreign income, but is exempt from paying tax on this income (in South Africa), you must set the indicator in the field Foreign income is exempt from tax on the infotype Taxes SA (0149). However, even if the employee is exempt from paying tax, you must still record the foreign earnings for this employee on infotype Foreign SARS codes (0725).