The much anticipated ruling on Immigration Directive 21 of 2015, barring Refugees and Asylum seekers from applying for a change of status to any visa or permit in terms of the Immigration Act, was handed down by in the High Court of South Africa on 21 September 2016. It has been declared that Directive 21 is inconsistent with the Constitution of the Republic and therefore invalid and must be set aside.
The judgement further clarifies that even failed asylum seekers must be permitted to apply for a visa by affording them the same opportunity as illegal foreigners in section 32 where allowing individuals to approach the Director-General for authorisation to apply for a visa.
The work permit process can be time consuming and even painful, depending on your permit categorisation. One question often asked is whether an expatriate should not consider Permanent Residency application sooner, effectively lifting the expatriate’s status above the noise of normal work permit requirements. We found that there can be a significant upside however, depending on the complexities there may also be adverse consequences.
Why Permanent Residency?
Permanent Residency allows the holder to live and work in South Africa unlimited including the right to work without restriction, engage in business, own property, study and do all things a citizen is permitted to do with the exception of voting in the South African elections. You may only do so once you have been naturalised as a South African citizen. Permanent Residency in South Africa also allows its holder maximum flexibility with regards to entry and exit through the country’s borders. Read more
The almost 200 000 Zimbabweans currently on permits issued under the Zimbabwean Special Permit (ZSP) project, have to seek alternative permits if they wish to extend their work, study or stay in South Africa beyond 2017, Home Affairs Minister Malusi Gigaba has said.
“Those from Zimbabwe, as we announced last year when we announced the extension until December 2017, will in the meantime, between now and December 31st of 2017, have to regularise themselves in South Africa by applying for other permits and visas which are provided for in the Immigration Act,” Gigaba told reporters in Rustenburg in South Africa.
“The special Zimbabwe dispensation cannot exist forever. We therefore have to move towards a phase where we regularise them by ensuring that we provide them with visas in terms of the Immigration Act, and not through special arrangements.” Asked what would happen to the Zimbabweans based in South Africa if they have not attained other permits by December 2017, when their special dispensation permits expire, Gigaba said he wouldn’t speculate over the matter. Read more
A growing number of countries determined to attract entrepreneurs to their soil are handing “start-up visas” to the best and brightest of them.
A start-up visa enables entrepreneurs to live and start businesses in countries where they are not citizens or permanent residents, for a defined period of time.
According to global entrepreneur network Startup Nations, at least a dozen countries now have start-up visa programmes. These include Australia, New Zealand, Singapore, the UK, Ireland, France, Spain, Italy, the Netherlands, Denmark, Canada and Chile. Startup Nations’ network continues to grow, and is expected to add the likes of Argentina, Poland, Norway, the Dominican Republic and Estonia, which plans to implement a start-up visa programme in January. Read more
Effective 1 August 2016, visas will be issued with a “Valid From” date instead of an “Issue date” which will accurately calculate the expiry dates of visas. This is an issue that has been plaguing expatriate employees. The time employers have previously spent on correcting visas to ensure correct expiry date will no longer be necessary.
Directive 19 of 2016 was issued by the Department of Home Affairs to this effect.
The Department of Home Affairs will host an inaugural naturalization in honour of foreign nationals residing in South Africa. In this ceremony applicants who have been permanent South African residence holders for a period of 10 years will be formally awarded certificates, while they will be expected to take an oath affirming their allegiance to the Republic of South Africa. The function will take place in the East Rand later Wednesday.
Earlier this year Gigaba introduced the Lesotho Special Permit (LSP). It was indicated that the introduction of the permit was largely influenced by the “success” of the Zimbabwean special permit project, and is aimed at regularising the status of Basotho nationals in South Africa. The scheme will ensure that Lesotho and South African Governments have the biometric data of the individuals in question available to them, and thus equates to free movement between the countries. Although exact figures are not known, Basotho authorities have previously indicated that there are in excess of 400,000 Basotho nationals residing in South Africa.
Please note that all LSP applications must be submitted before 30 September 2016.
In the past months the Department of Home Affairs indicated that graduates of South African universities will soon be able to apply for Permanent residency, providing that they have completed their studies in “critical skills areas”. This aims at putting the skills and knowledge that the graduates have obtained from South African universities to good use in South Africa, and opens the way for international students to work or start a business in South Africa after graduation.
South Africa is one of the expatriate jurisdictions where proactive planning makes a significant difference to the tax and exchange control implications of an international mobile employee. The primary reasons are:
- Unlike most other countries, with good planning, you only become ‘tax resident’ in the beginning of your sixth year in South Africa; and
- There are various tax provisions which provide specific tax relief for expatriate employees, as well as various South African Revenue Service (SARS) practice notes and binding rulings that gives additional relief.
Typical mistakes you should avoid:
The following are examples of things that may sound like a good idea, but, from a South African tax perspective, is not:
- Open ended contracts and applying for permanent residency too soon. These are examples of items which SARS and the South African Reserve Bank often use to determine whether you have an intention to reside permanently in South Africa thus making you ordinarily resident and therefore, tax resident in South Africa. Not only will you then be liable to tax in South Africa on world-wide income, but you will also be subject to South African exchange control regulations. We have in recent months defended expatriates who SARS held to be tax resident in South Africa on the basis of an open ended employment contracts. Good planning would be entering into a fixed term contract with the option to renew.
- Housing or accommodation related allowances are never good ideas because they are fully taxable with no tax relief. Company provided accommodation either directly or through outsourced provider qualifies for various exemptions.
- Expatiates based in South Africa but who travels internationally qualifies for various exemptions. Whilst the principles are complex and there is no ‘one-size –fits-all’, it dates back to 1946 and states that days worked outside South Africa by a non-resident is exempt from South African tax.
A word of caution:
Whilst South African tax law has favourable provisions for expatriates, SARS has a dedicated audit focus on expatriates, for example, in the SARS standard payroll questionnaire, there is an entire section dealing with expatriates to ensure correct treatment and to identify abuse of favourable provisions.
The rule of thumb is that the employment contract or secondment agreement should be optimally structured from a tax perspective. This must be done before the work permit application.
Information provided by www.taxconsulting.co.za
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