Types of South African income taxable for non-residents in 2025

IOL News

2 days ago

more focus is being placed on the types of income taxable for individuals who are not tax residents in South Africa.
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Following SARS's recent changes to the 2025 tax return for non-residents earning South African-source income, more focus is being placed on the types of income taxable for individuals who are not tax residents in South Africa.
IOL previously reported that the revenue service has moved to make things easier for non-resident taxpayers earning income from South African sources by introducing new enhancements to the 2025 tax return process.
These changes include updates to the ITR12 tax return form to help ensure non-residents complete the correct sections and submit accurate returns.
Alongside this, the revenue service has clarified the various types of South African-source income that non-residents may be liable to tax on.
Types of income
Non-resident taxpayers may be subject to tax on various types of South African-source income, including: Employment income
Employment income earned by a non-resident in South Africa is generally subject to normal tax. However, if a Double Taxation Agreement (DTA) applies and all of the following conditions are met, the income is exempt: The individual is in South Africa for 183 days or less in any 12-month period.
The employer is not a South African resident.
The income is not paid from a permanent establishment of the employer in South Africa. Pension and annuities
An amount received by a non-resident that constitutes a lump sum, pension or annuity from a pension fund, pension preservation, provident fund or provident preservation fund and the services in respect of which that amount is received or accrued were rendered in South Africa, is subject to normal tax in South Africa.
If the amount received or accrued relates to services rendered inside and outside South Africa, only the portion of the amount relating to services rendered in South Africa is subject to tax in South Africa.
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Interest
Non-resident interest from South African sources is usually exempt from normal tax unless the person is in South Africa over 183 days or connected to a permanent establishment.
Exempt interest is subject to 15% withholding tax unless the person exceeds 183 days, in which case normal tax applies with some age-based exemptions. Dividends
Dividends tax is payable at a rate of 20% with effect from 22 February 2017 on dividends paid by companies that are residents (other than headquarter companies).
Dividends tax is also payable on a foreign dividend to the extent that the foreign dividend does not constitute the distribution of an asset in specie and it is paid by foreign companies in respect of listed shares. This rate is, however, subject to a reduction in terms of the various DTAs. Although dividends tax is part of the Act, it is a separate tax from normal tax. Royalties
Non-residents receiving royalties for intellectual property used in South Africa generally face a 15% withholding tax, unless they've been in South Africa over 183 days, the royalties relate to a permanent establishment, or they're paid by a headquarter company. If exempt from withholding tax, the royalties are taxed normally. Rental income
The source of rental income is generally regarded to be where the property is used on a day-to-day basis. Rental income which arises in South Africa, received by or accrued to a non-resident will be subject to normal tax in South Africa. Expenses such as rates and taxes, bond interest, insurance, repairs may be claimed as deductions against such rental income, subject to certain conditions.
Capital gains tax (CGT)
Non-residents are only liable for Capital Gains Tax in South Africa on immovable property, shares or trust interests mainly linked to South African property, and assets tied to any permanent establishment they have in the country
For more details on other taxes like estate duty and tax on foreign entertainers and sportspersons, check SARS webisites.
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