An international taxation comparison of South African, Dutch and Australian employees working abroad

Abstract

The effects of globalisation and economic growth have resulted in employee migration becoming increasingly popular. According to the World Bank (2011), more than 215 million people are living outside their countries of birth during 2011. Egger and Radulescu (2009) suggest that the progressivity of the tax system at high income tax brackets is quantitatively the most important component for expatriates or migrants. Data suggests that countries differ remarkably with regard to the income tax burden on highly skilled workers. The main purpose of this study is to compare the tax consequences relating to South African, Dutch and Australian employees working abroad. The study provides a better understanding of the tax consequences for a South African, Dutch and Australian employee working abroad. It was found that the tax systems in the Netherlands, Australia and South Africa are similar in that they are all residence based. In each of these three countries tax residents are taxed on worldwide income while non-residents are only taxed on income from specific sources. Therefore, tax residency is an essential concept in each of these tax systems. However, the basis used to determine tax residency, and the factors considered, differ from country to country. Since there is a difference in determining tax residency, the taxability of amounts earned from abroad also differs between the countries as the taxability of income earned is determined according to one‟s residency status. AFRIKAANS : Een van die gevolge van globalisering en ekonomiese groei is dat werknemer-migrasie toenemend gewild geword het. Volgens die Wêreldbank (2011) woon meer as 215 miljoen mense in 2011 buite hul land van geboorte. Egger en Radulescu (2009) stel voor dat die progressiwiteit van die belasting teen 'n hoë inkomste die belangrikste komponent vir uitgewekenes of migrante is. Data dui daarop dat lande merkwaardig verskil ten opsigte van die inkomstebelasting op hoogs-geskoolde werkers. Die hoofdoel van hierdie studie is om die belastinggevolge met betrekking tot Suid-Afrikaanse, Nederlandse en Australiese werknemers wat in die buiteland werk, te vergelyk. Die studie bied 'n beter begrip van die belastinggevolge vir ‟n Suid--Afrikaanse, Nederlandse en Australiese werknemer wat in die buiteland werk. Daar is gevind dat die belastingstelsels in Nederland, Australië en Suid-Afrika soortgelyk is, in die sin dat hulle almal op verblyfplek gebaseer is. In elk van hierdie drie lande word belasbare inwoners op wêreldwye inkomste belas, terwyl nie-inwoners net op die inkomste van spesifieke bronne belas word. Daarom, is belasting-inwoning 'n belangrike konsep in elk van hierdie lande. Maar die basis wat gebruik word om belasting-inwoning te bepaal en die faktore wat oorweeg is, verskil tussen hierdie lande. Aangesien daar 'n verskil in die bepaling van belasting-inwoning is, is daar ook ‟n verskil in die belasbaarheid van die bedrae wat uit die buiteland verdien is, want die bepaling van die belasbaarheid van inkomste is op 'n mens se verblyfstatus gebaseer. Copyright