InfoBytesSeptember 8, 2023

Proposed new Treasury regulations may limit a foreign employer’s ability to pay South African workers in foreign currency

National Treasury has proposed new tax legislation which seeks to align the obligations of foreign employers with that of their South African counterparts.

The new proposed requirements will place additional burdens on foreign employers as, besides paying the skills development levy and contributing to the Unemployment Insurance Fund, they would also need to:

  • Register as an employer with SARS to receive an income tax registration number
  • Include PAYE deductions in their payroll process
  • Register with the Companies and Intellectual Property Commission (CIPC)

This could see employers become bogged down in red tape, which is never good news as it stifles business innovation, agility and the freedom of individuals’ ability to earn competitive wages. It also has unintended consequences of potentially restricting the tax base and limiting foreign investment, thereby killing the golden egg of South African remote workers’ potential and the country’s competitive advantage as it competes with locations like Spain and Portugal.

But by partnering with a South African employer of record, such as CROS, which specialises in the provision of employment-related services to organisations in a foreign country, foreign employers can ensure that they remain compliant with South African tax regulations, minimise their tax liabilities, and reduce the administrative burden of managing tax-related tasks.

For more information on how CROS can help you navigate your payroll and foreign legislation needs, contact Nicol Myburgh on nicolm@crs.co.za.

 

2024/2025 Tax Guide


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