MONEY CLINIC | I am emigrating but will work remotely for my SA employer. How will I be taxed?

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Upon emigration from South Africa and taking up permanent residency in the Netherlands, you will be considered a tax resident of the Netherlands.
Upon emigration from South Africa and taking up permanent residency in the Netherlands, you will be considered a tax resident of the Netherlands.
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A Fin24 reader and her husband are planning to emigrate to the Netherlands. She wants to know if she would continue paying tax in SA if she keeps her current job.

She writes: 

My husband and I will be emigrating from SA to the Netherlands at the end of the year. He accepted an offer of permanent employment there. However, I will still work (remotely) for my current employer in South Africa as a permanent employee.  

Do I continue paying tax in South Africa, as all my income is earned in South Africa? Or does the residency test also apply to my case whereby I would need to start paying tax in the Netherlands at some point because I permanently live there?

Ryno Viljoen, chief executive officer of FinGlobal, responds: 

Upon emigration from South Africa and taking up permanent residency in the Netherlands, you will be considered a tax resident of the Netherlands and subject to income taxation in the Netherlands.

The Dutch General Tax Act states that an individual's place of tax residency is based on facts and circumstances which includes, but are not limited to:

where you spend most of your time at a Dutch residence

if your spouse/partner/family also lives in the Netherlands

if your children receive an education in the Netherlands

if you are a member of one or more clubs/societies in the Netherlands.

The South African Revenue Service (SARS) will need to be informed that your intention is not to return to South Africa and that you are ceasing your South African tax residency. Your South African employer, however, might continue deducting tax on your income as the income is earned from a South African source.

The Double Tax Agreement (DTA) between South Africa and the Netherlands should be considered in order to provide relief and allocate the taxing right on your income to your resident country.

Note that, with the cessation of South African tax residency, you will become liable for "exit tax", being capital gains tax, based on your worldwide assets. 

Questions may be edited for brevity and clarity.

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