Globe-Trotting Sportsman Or Entertainer: South Africa

A South African citizen with extensive, international, multi-sourced income is not in a good tax situation unless he or she can establish non-residence, since full, world-wide taxation of income will apply.

If ordinarily resident in South Africa, the peripatetic professional may well find himself paying withholding tax in a number of countries which cannot in some cases be reclaimed or set off against South African taxation because of the absence of a tax treaty.

'Ordinary residence' is not defined in the law, but has been described as involving some continuity of residence, or as being the place where a person's belongings are stored, and to which he means to return. In the case of foreign-source interest income, a 183-day residence rule has been introduced to distinguish between those who pay or do not pay tax (which seems to clarify the meaning of ordinarily resident).

Such an individual will almost certainly resort to corporate structures to market his or her skills and manage derivative income flows. It may well be that these can usefully be based in offshore jurisdictions, although complex structures may be necessary if corporate anti-avoidance rules are to be avoided.

Apart from the extra difficulty of minimising tax on the income side, a South African-resident sportsman or entertainer will be in the same position as any other ordinarily-resident South African national. (Select 'High-Tax Country Resident' and 'South Africa' for a fuller description).

If a foreign sportsman or entertainer becomes temporarily resident, then he or she is in the same position as an expatriate executive (select 'Expatriate Executive' and 'South Africa').

Such individuals who have significant business income may be able to make use of offshore corporate tax shelters in order to minimise South African taxation.

www.lowtax.net contains details of the offshore business sectors of 35 jurisdictions, and their taxation.

Individuals who have significant non-South African business income may be able to make use of offshore corporate tax shelters, especially involving Mauritius.

www.lowtax.net contains details of the corporate and partnership legal structures available in the 35 most prominent offshore jurisdictions, including Mauritius, together with descriptions of the most important business sectors in each jurisdiction, local tax regimes, and the international treaties entered into by each jurisdiction.

NB: The suggestions given above do not constitute investment advice. They are intended only to assist individuals in finding appropriate professional advice, which is essnetial for anyone planning offshore investment.