South Africa may soon see its first batch of remote workers entering the country on the newly created species of visitor’s visa aimed at foreign employees.

Following the draft published earlier this year, the amendments to the Immigration Regulations which, among other things, introduce the new ‘digital nomad visa’ in South Africa, have come into operation with effect from 28 March 2024.

The promulgation of the Second Amendment of the Immigration Regulations (Second Amendment) in the Government Gazette comes as a surprise, one day before the closing date for public comments on the draft version. The timing raises the question whether any comments were considered by the Minister of Home Affairs, who afforded the public until 29 March 2024 to make written submissions.

One of the issues flagged when the draft was published was the proposal for foreign employees working in South Africa to be exempted from registering with the South African Revenue Service (SARS) if their visa is issued for a period of less than six months in a 12-month period.  Although this exemption only deals with the tax compliance obligation to register as a taxpayer and submit income tax returns, this effectively provides an income tax exemption for these individuals. As this exemption is not currently provided for in the Income Tax Act, 1962 (ITA), it would require an amendment of the ITA.

With respect to the individual’s actual tax liability, the position is currently as follows: An employee who is tax non-resident (which ‘digital nomads’ would generally be) would be subject to income tax on their income from a South African source. It is generally accepted that the source of remuneration would be where the services are rendered. The employees would thus, in principle, be subject to income tax on their remuneration, to the extent that it relates to services rendered in South Africa.