Our specialists have compiled and answered some of the burning questions that our seafarer clients frequently ask. Please note that these answers are specific to the question posed and may differ from person to person depending on your exact circumstances. We encourage you to schedule a consultation to obtain more pertinent advice on your situation.
Click here to read about our holistic solutions for seafarers.
I was under the impression that working offshore was tax free?
Many Seafarers are under the assumption that they are non-taxable in South Africa, however, this is not always the case. One needs to consider tax laws and most importantly your tax residency as this will be the first step to govern your tax liabilities.
Click here to read more about how you will be affected.
How will relevant International Revenue Authorities ever find out about my foreign earnings?
We are often approached by seafarers who confidently believe that their earnings are “hidden” from revenue authorities – this is not the case. There are hundreds of Jurisdictions that have agreed to and signed the OECD’s “Common Reporting Standard” (CRS), which means they are now obligated to obtain pertinent financial information from their financial institutions and automatically exchange this with other jurisdictions on an annual basis. Put simply, if you are living in a jurisdiction that has to comply with CRS, then your financial information will be shared with the relevant Revenue Authority. Click here for a list of countries.
Click here to read more about your obligation how you fit in we can help you.
I am South African working at sea for a few years now, but never paid tax nor thought of the consequences, what should I do?
As a first step, it is important to determine if you are tax resident of South Africa, as laid out by the two tax residency tests:
Click here to download the Ordinarily resident test.
Click here to download the Physical presence test.
If you are determined to be tax resident of SA, you are obligated to declare your past and present foreign and local earnings made aboard the vessel and apply for exemption where possible. It is important to note the two tax exemptions that can be applied on foreign employment income for those working on vessels. You can obtain tax relief on your foreign earnings if either exemption can be claimed. Click on the plus sign to read more.
Should one not have any assets, in SA, nor be a tax resident, it will not be necessary to register for tax, however it will still be advisable to ensure your non-residency is formalised with the authorities. This is extremely important to mitigate risk with the amended expatriate tax law taking effect 1 March 2020.
Why should I use a fixed term employment contract with Seafarers Global instead of just doing it myself?
It is trite law that you cannot employ yourself, therefore you need a legal person to be your employer. Where you are a high earner or have more complex requirements, it is possible to setup your own company. The law expressly recognises that you can be employed by a company of which you are the owner. This, however, comes with setup costs as well as monthly and annual compliance costs, which are significantly in excess of our employment solution.
Also, your situation must then warrant the business case of the administration, compliance and responsibilities of having your own company. We can refer you to one of our group companies should you believe that your personal complexities demand your own company, so we are acutely aware of that our employment solution is not a one-size fits all.
The only other alternative, i.e. ‘doing it yourself’, is being self-employed and this comes with certain advantages, but far greater risks. One of the key risks for South Africans working abroad is that self-employment or ‘independent contractor’ income is not part of the seafarer or 183-and-60 day tax exemption.
*Being employed in this way will not raise any non-compliances with MLC and will not affect your SEA in any way. Please ask us for more information on how this works.
Click here to read more about our employment solution.
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