Oliver Maher is a director at United Advisers Marine. Disclaimer: UA/BFMI is a member of Nexus Global and an appointed Representative of Blacktower Financial Management (International) Limited (BFMI). BFMI is licensed and regulated by the Gibraltar Financial Services Commission (FSC). UA/BFMI are not tax advisers and clients should always seek independent tax advice for their individual circumstances. +34 871 115 928; www.unitedadvisersmarine.com
Changes that came into effect on March 1, 2020, have focused on South African expatriates and their earnings.
Some South African superyacht crew incorrectly believe that because they have not registered for taxes with the South African Revenue Services (SARS), they are not liable to pay taxes in South Africa. This is not the case.
You must take care of your taxes more diligently, especially because of the changes that came into effect on March 1, 2020, which has placed a major focus on South African expatriates and their earnings. It’s also wise to be aware of the tax exemptions available to South African yacht crew. According to the country’s Income Tax Act 58 of 1962, there are three main exemptions that a seafarer can claim, depending on an individual’s situation and ability to meet the legal requirements relating to each of the exemptions.
The first seafarer exemption relates to officers or crewmembers on board a vessel, with foreign employment, whereby the vessel is involved in the international transportation of passengers/goods for reward and the taxpayer has been outside of South Africa for more than 183 days in any 12-month period, during which remuneration was received. Meeting the requirements of this exemption allows for full exemption from tax in South Africa on the foreign employment remuneration rendered.
You must take care of your taxes more diligently, especially because of the changes that came into effect on March 1, 2020, which has placed a major focus on South African expatriates and their earnings.
The second seafarer exemption relates to officers or crewmembers on board a vessel, whereby the vessel is engaged in prospecting, exploration, mining of minerals, or production of minerals from the seabeds outside of South Africa, and the taxpayer has been outside of South Africa for more than 183 days in any 12-month period, during which remuneration was received. This exemption only relates to those seafarers solely employed for the vessel’s navigation. Meeting the requirements of this exemption allows for full exemption from tax in South Africa on the foreign employment remuneration rendered.
The expat exemption applies to all South African taxpayers who earn foreign employment income, and the taxpayer has been outside of South Africa for more than 183 days, of which 60 are consecutive days, in any 12-month period in which remuneration was received. This exemption previously exempted all foreign employment remuneration; however, with effect from March 1, 2020, this exemption only exempts the first R1.25 million with the surplus being subject to taxation in South Africa.
As you can see, tax planning is more than just filing a tax return. It is a specialist field, and superyacht crew can benefit from expert advice from experienced tax professionals who work with seafarers, including yacht crew.
For clarification on the above, get in touch with United Advisers Marine and we will refer you to our partner who specializes in tax advice for South African yacht crew.
This column originally ran in the March 2021 issue of Dockwalk.