Working overseas can often lead one to being caught out with unpaid tax. Whether you’re a young graduate teaching English in Asia, a 50-something homemaker doing caring work in Britain, or a highly skilled professional, it’s important to know what the South African Revenue Services (SARS) expects if you’re working abroad. As a South African citizen and tax resident, you are potentially liable to pay tax even if you’re not living in the country. By understanding some basic tax rules, you can avoid inadvertently breaking some laws, and can also judge whether you might already owe SARS a payment. This is particularly relevant if you’re earning good money abroad, as new laws become effective from March next year, closing some lucrative loopholes.
Case Study One
Mark, 23, plans to teach English in Vietnam for two years and hopes to earn R20 000 per month. A recent graduate, he has not yet worked formally or paid tax. Although he might think that earning an income from an overseas source isn’t taxable back home, in this instance it is not necessarily the case. The South African taxation system works on a residence-based tax system, meaning we’re taxed on worldwide income. Under current law, Mark’s foreign income may not be subject to South Africa tax if he spends at least 183 days (roughly 26 weeks, or about six months) of a consecutive 12-month period outside of South Africa teaching English through his foreign employer. At least 60 of these days must be continuous. Under new laws, effective from 1 March 2020, South African residents who spend more than 183 days working outside the country will be subject to South African tax on foreign employment income over R1m. Mark won’t earn enough to fall into this tax bracket, but it is still important for him to register with SARS and file a tax return on money that he will earn next year even if he is not liable to pay tax. The good news for Mark is that doing your tax online has been made easier: Innovations in South African Revenue Services (SARS) such as eFiling and the MobiApp, makes it simpler to register and navigate, meaning Mark can now register with SARS eFiling.
Case Study Two
Mary, 55, has undertaken contract care work in the UK for seven months a year, for three years. Her accommodation and food are covered and R35 000 per month earnings have managed to sustain her family well (children have left the family nest, but Mary’s husband Peter is an invalid). Mary has not completed a SARS tax return over the past few years and is concerned that Brexit may affect her. Under current law, Mary’s foreign income may not be subject to South African tax if she spends at least 183 days (roughly 26 weeks, or about 6 months) of a consecutive 12-month period outside of SA. At least 60 of these days must be continuous or unbroken, however, so Mary should think twice before flying back often between caring stints. New laws will not affect Mary as she does not earn over R1 million, but it is still important for her to register with SARS and file a tax return. Mary should meet with a qualified tax consultant for some advice. She may already be paying some tax through the British agency that finds her placements. She could claim expenses against her income, for example the costs of air tickets between South Africa and Britain, and transport to reach her place of work. This may be relevant to UK tax law, but as she will not be paying tax in South Africa it would not be in SA. At this stage Brexit negotiations are unlikely to affect Mary, but her tax advisor will keep her updated.
Case Study Three
Sipho, 46, is a senior financial services manager in Hong Kong. Sipho earns R4 million a year plus a discretionary bonus that is around R1million a year. He has been working overseas for three years and plans to return home in two years’ time. Sipho is the type of taxpayer who will be affected by the new law. He will have to declare all of his Hong Kong income in South Africa and will be taxed on his foreign earnings exceeding R1m. As he is earning well above the rand equivalent of R1,5m, he will have to pay tax on up to 45% of his US earnings, in South Africa. He will be able to deduct the foreign tax he has paid so as not to be taxed on the same income twice, however he will no longer reap the benefits of the lower Hong Kong tax rate. Sipho may decide he does not want to return to South Africa after all and may be advised to financially emigrate, which means he will get to keep his South African citizenship and passport, but will be emigrating from a tax point of view. This is a formal SARS and South African Reserve Bank process. SARS will treat Sipho as if he is selling all his assets in South Africa – even if he isn’t – and he will need to pay tax on that amount as capital gains tax for all assets sold except for property.
From preventative medicine to smart mobility and 5G — the 2020s will see significant trends driving global growth over the next decade.
The Roaring Twenties of nearly 100 years ago was defined by a surge of consumerism, a brightly revitalised global economy and the arrival of the concept of mass culture. It was also a time of significant political and social change — an undercurrent that charged conversations and technological innovation. Today, the world awaits the 2020s, with eager anticipation and much excitement, as a decade likely to be defined as much by further leaps in technological innovation as by its socially influenced political and economic upheavals. The resultant landscape will inevitably require a much more comprehensive level of understanding to effectively capture the growth opportunities.
“There are seven major themes that will drive global growth over the next decade,” says Jonathan Sieff, Senior Portfolio Manager at Sasfin Wealth. “These will change the way we live, the way we travel, how we engage and collaborate, and how we work. Each of these themes should form part of any forward-thinking investment portfolio to ensure it is capable of benefiting from these specific market forces.”
The cost of medical solutions has reduced exponentially over the years – the complex process of mapping the human genome cost over US$ 1bn when it first emerged, but by the mid 2020’s it will be mapped for less than a few hundred dollars. This has huge ramifications for preventative medicine as doctors can use genome mapping to assess cell mutations and invest in preventative care that could mitigate the health impacts of obesity, cancer and so much more. This will be complemented by further advancements in robotic surgery, preventative diagnostic equipment, improved education and medical intervention techniques.
This involves combining materials like lithium and cobalt with metalloids, such as silicon, or innovative organic compounds to produce the batteries of the future — “new technologies required to drive the concept of e-mobility forward,” says Sieff. “The next decade will see significant refinements to connected vehicles and mobility solutions that will fundamentally change the way we travel, such as autonomous vehicles that bypass fossil fuels entirely.”
This buzzword, and its enabler, 5G involves digitally animating the physical world using a vast array of devices, with 5G enhancing the speed and reliability of connections across the globe. For now, 5G penetration is still relatively low globally. For example, the concept of the smart home has yet to entrench itself as a modern living standard. Only 3% of homes in the United States are smart homes, with seamless communication between devices to enhance quality of life. The next few years should see this concept become increasingly accepted and entrenched as the costs of internet access, mobility and technology reduce further.
Robotics and Artificial Intelligence (AI)
Robotics and AI will continue to have a huge impact on the Fourth Industrial Revolution (4IR). “Technology and cost efficiencies will redefine consumer robotics and improve quality of living by automating a number of previously menial human functions, according to Sieff. AI-assisted diagnostics will be able to provide personalised care and improved treatment outcomes, and by considering all available evidence, deliver predictive analytics to detect hidden factors and reduce side effects through personalised drugs.
Digital Entertainment and eCommerce
In terms of digital entertainment, “online content and how people access and aggregate their information will continue to innovate,” explains Sieff. “Online streaming TV is fast replacing cable and satellite delivery and this trend will continue to accelerate. Alongside this trend, the world of advertising is clearly trending towards programmatic advertising, which will have a powerful impact on personalisation and eCommerce growth.” The 2020s will see the omnichannel retail world continue to shift on its axis to become increasingly accessible and relevant to the consumer. This will be particularly obvious in developing countries, such as South Africa, where the online market remains limited but is now showing signs of significant growth.
Cloud Computing and Cybersecurity
Arguably the penultimate theme of the 2020s, the cloud computing and cybersecurity market is growing exponentially and is extremely competitive. It will be defined by continuous innovation, embedded cybersecurity, and privacy of information. These factors will influence which organisations thrive and which wither over the decade as those that adapt will likely grow alongside cloud demand.
Sustainable energy will dominate in the 2020s,” says Sieff. “There is an increasing awareness of the need to live more sustainably and to invest into renewable power innovation. Innovation has become a necessity, given the environmentally harmful nature of fossil fuels over and above their finite nature. It has also improved the relative cost advantage for renewable options as population growth and ongoing urbanisation continue to drive the increased consumption of electricity, particularly in a world of more interconnected devices.”
DataProphet, a global leader in artificial intelligence (AI) in manufacturing, was selected among hundreds of candidates as one of the World Economic Forum’s “Technology Pioneers”. DataProphet was founded in 2014 and has since modernised manufacturing plants through advanced deep learning, resulting in significant, practical impact on the factory floor.
The World Economic Forum’s Technology Pioneers are early to growth-stage companies from around the world that are involved in the design, development and deployment of new technologies and innovations, and are poised to have a significant impact on business and society.
This year’s Tech Pioneers are emerging innovators from a diverse set of industries. These firms are shaping the future by advancing technologies such as AI, IoT, robotics, blockchain, biotechnology and many more. The focus areas of this year’s Tech Pioneers, include agtech, smart cities, cleantech, supply chain, manufacturing, cybersecurity, autonomous vehicles and drones.
The diversity of these companies extends to their leadership as well, as 25% of 2019 Tech Pioneers are female led. The firms also come from many different regions beyond the United States and Silicon Valley. In fact, this year’s class of 56 firms represent every continent except Antarctica. The full list of technology pioneers can be found here.
Following its selection as Technology Pioneer, DataProphet’s CEO and Co-Founder, Frans Cronje, participated in the World Economic Forum Annual Meeting of the New Champions. This meeting, also dubbed “Summer Davos” was held in Dalian, China earlier this month. Many Pioneers will also attend the Annual Meeting in Davos, in January 2020, and continue to contribute to Forum initiatives over the next two years.
“We’re excited to welcome DataProphet to this year’s innovative class of technology pioneers,” says Fulvia Montresor, Head of Technology Pioneers at the World Economic Forum. “DataProphet and its fellow pioneers are leaders in using novel technologies to transform their industries. We see great potential for these next generation companies to shape solutions to global challenges and improve society for years to come.”
“It’s a huge achievement to be acknowledged as a pioneer by the World Economic Forum,” said Frans. “It is great to receive affirmation that our AI technology is unique and valuable when it comes to reducing defects and improving processes for manufacturers. We are excited to partner with the Forum to shape the future of manufacturing.”
The Technology Pioneers were selected by a selection committee of more than 59 academics, entrepreneurs, venture capitalists and corporate executives. The committee based its decisions on criteria including innovation, potential impact and leadership. Past recipients include Airbnb, Google, Kickstarter, Mozilla, Palantir Technologies, Spotify, TransferWise, Twitter and Wikimedia.
Lightyear, a pioneer in clean mobility, introduced the first long-range solar car today. The prototype was presented to investors, customers, partners and press at dawn in Katwijk, the Netherlands. “This moment represents a new era of driving,” said Lex Hoefsloot, CEO and co-founder of Lightyear.
Lightyear was founded in 2016 by alumni of Solar Team Eindhoven, which won the Bridgestone World Solar Challenge. Since the launch, Lightyear has received awards, grants and support from key investors. This allowed them to develop a prototype for the first long-range solar car in just two years. Lightyear One has been engineered to optimise efficiency and safety. It has a longer battery range than its competitors and charges whenever it’s in the sun.
“Climate change is such a frightening development that it’s almost paralysing,” remarked Hoefsloot. “We decided to do the opposite; as engineers, we believed we could do something. Lightyear One represents an opportunity to change mobility for the better.”
And this is just the beginning. “Since new technology has a high unit cost, we have to start in an exclusive market. The next models we plan to develop will have a significantly lower purchase price. In addition, future models will be provided to autonomous and shared car fleets, so the purchase price can be divided amongst a large group of users. Combined with the low operating costs of the vehicle, we aim to provide premium mobility for a low price per kilometre.”
Lightyear claims drivers could go up to 20,000 kilometres a year on the sun, depending on the climate. The fast-growing company was founded in 2016 and now has more than 100 employees. The team is a mix of young talent and experience from the automotive industry, including former employees of Tesla and Ferrari.
Resolution Circle has announced that its Board of Directors has appointed Gideon Potgieter as Chief Executive Officer and member of the Board of Directors effective immediately. Potgieter previously held the position of Group Senior Manager Business Development and has served as Interim CEO since May this year.
“During the time of renewing the focus of Resolution Circle in support of technical professional education, I’m pleased that Mr Gideon Potgieter has been selected as CEO. This selection brings both the element of continuity and change – this remains helpful for a transition.” says Prof Saurabh Sinha, Resolution Circle’s Chairman of the Interim Board and UJ Deputy Vice-Chancellor: Research and Internationalisation.
Gideon studied electronics obtaining his National Diploma and later his National Higher Diploma at the institution that has now been amalgamated into the University of Johannesburg. He later completed his MBA at the Rotterdam School of Management at the Erasmus University. Gideon has worked in several industries ranging from High-Tech Electronics and Information Technology to Automotive, Education and Medical Insurance in South Africa and abroad.
Most recently he became involved with the product and technology development for startups in the Bio-Tech, Clean-Tech and High-Tech areas through Resolution Circle.
Since joining Resolution Circle in 2014, Gideon has spearheaded major strategy and technical shifts across the company’s portfolio of products and services.
He has also been fundamental in redefining the company’s core offering, which is professional technical training and programmes for market readiness, targeted at learners from TVET, comprehensive universities, e.g. UJ, and universities of technology. The company also offers skills development modules that are not necessarily linked to a qualification and short learning courses in Technology like Arduino, Fibre optic, Programmable Logic Control (PLC) and Solar PV. The current Arduino and PLC courses are building blocks of the Industry 4.0 revolution.
Having started his career in electronics, then moving onto computer hardware and networking. Gideon has followed the same path as the company’s interns, so he understands their needs. He also had a great understanding of the the needs of the industry.
“During my time at Resolution Circle I have become involved in the product and technology development of other companies, and I have learned a great deal about the start-up and entrepreneurship scene in South Africa,” says Gideon, “I believe in participative management – I encourage and appreciate the input of employees and look forward to working with and leading my team in taking our strategy forward.”
“The opportunity ahead for Resolution Circle is vast, but to seize it we must focus clearly and continue to transform. A big part of my job is to accelerate our ability to bring innovative products to our customers more quickly.” Gideon adds, “I would rather try something and fail than not trying at all.”
Speaking on behalf of the board, Prof Saurabh Sinha says, “We believe Gideon has the right operational and communication skills and leadership abilities to deliver improved execution and financial performance.”
About Resolution Circle
Resolution Circle is a training hub that prides itself on providing experiential learning opportunities to undergraduate electrical and mechanical engineering students from universities of technology, practical in-service project training, various short-learning and candidacy programmes applicable to the ever-changing world of engineering and engineering technology. We are a University of Johannesburg initiative.
For more information visit: www.resolutioncircle.co.za
October is Transport Month and a reminder that a well-developed and properly maintained transport infrastructure is critical for economic sustainability and growth in South Africa. This year’s theme – Transport, the Heartbeat of Economic Growth and Social Development – underscores this reality.
Innovative Staffing Solutions Managing Director, Arnoux Maré, says transport is a key contributor to the country’s GDP. “The sector is an important driver for development and job creation in the country. Notably, transport GDP reached an all-time high of just over R 27.1 million in the first quarter of 2018.”
Maré is however concerned about October’s fuel increase and its impact on the transport industry and job creation in this particular sector. The department of energy has attributed the increase to the weakening rand exchange rate, the increased prices of crude oil and the import prices of petroleum. “The fuel increase is the biggest in the country’s history and could potentially have catastrophic implications as it will extract a further R2.5 billion a month in transport costs from an economy that is already on the ropes.”
Since starting his business seven years ago, Maré has grown the outsourcing company’s driver complement from a handful of drivers in 2011 to more than 5 500 drivers in 2018. “We outsource drivers to clients in various industries, which means we need to make sure they are competent, well-trained and happy to be working for us.”
This year, Innovative Staffing Solutions invested in two trucks dedicated for truck driver training. “We couldn’t expect our clients to relinquish their trucks for training purposes, so we decided to buy two trucks – a Renault Kerax and a Volvo – to allow us to train truck drivers on a daily basis.”
This year, more than 2 000 drivers have undergone training. “Advanced truck driver training is conducted by certified trainers and each driver undergoes three to four hours of training. The trainers spend one-on-one time with drivers to test their driving skills and brush up on their road regulation knowledge,” says Maré.
He points out that truck drivers have an enormous responsibility. “Not only are they responsible for driving heavy, expensive vehicles that can cause extensive damage if they crash, they are also responsible for carrying valuable loads from one destination to the next. So it is imperative that they are highly competent and display a high degree of reliability and accountability.”
With more companies beginning to realise the benefits of outsourcing their non-core functions, Maré expects his driver complement to grow significantly over the next few months. “We believe we are making a significant contribution to the transport industry by creating thousands of jobs and making sure our drivers are well trained and fully supported.”
This support includes making sure they are getting competitive salaries and other benefits. “Earlier this year, we negotiated an excellent deal for our drivers with one of the major medical aid players in the country. This was a ground-breaking move, because historically, drivers have either not had medical aid or been on below-par medical aid packages,” adds Maré.
Innovative Staffing Solutions also manages drivers schedules carefully to reduce driver fatigue and has advanced fleet technology monitoring systems in place to reduce the chance of accidents and ensure drivers and their cargo get to their destinations on time.
Maré says Transport Month, which was initiated in 2005 at the Transport Lekotla, is an important reminder for South African citizens of the important role transport plays in their lives. “Our transport infrastructure is like the body’s circulatory system – it feeds all aspects of the economy and without it we would not be able to grow and thrive.”