Wednesday, August 31, 2016

Tax advice for returning expats

My friend and I are contemplating relocating to South Africa after 10 years abroad.

Upon seeking employment we have experienced a remarkably positive response and were quite enthusiastic about our decided return. Then we were advised of taxes.

We were advised that should someone receive an annual salary in the range of R700 000, he/she would be left with around R500 000 after tax deductions. That seems like a lot of money.

As we are more familiar with the European tax system, we were wondering if you could help us by explaining the healthcare, educational and social security benefits that that R200 000 every year, or R1 000 000 every five years, pays for.

We have been advised that there are no benefits, but I am certain that there is no way that this could be true. And so we would really appreciate some accurate advice from the people in the know rather than disgruntled individuals complaining about the country.

I apologise if these questions seem trivial, but we have never been employed in the country and the numbers are just not making sense.

We know we do not have accurate information, but from what we can tell it appears 40% is tax, 30% mortgage, 10% transport, 15% provident fund, 5% left to live.
Also, we have been told that one has to pay for one's own medical aid and security and that topped with the provident fund it seems as though there's a either a misunderstanding or a duplication in what tax pays for and what we are opting to pay for.

My friend is in the UK where government housing and medical aid as well as social security is really not bad. I am in the UAE where medical aid is provided for by the employer and housing is either provided by the employer or an allowance is given.

Participating in a retirement fund is at your discretion. But there is no income tax here, so we are really and truly at a loss.

Look, our bags are packed to leave in a week and we are pretty much ready to come home, but if this information is correct, while we still have an option to stay where we are we would really appreciate your guidance in this regard.

I have emailed the South African Revenue Service and tried again on their Facebook page. I'm sure we'll get a response but if you could guide us before then, it will really be a huge help in making an informed decision.