Foreign soccer players to be taxed

By Staff Writer
In the midst of complaints from aspiring entrepreneurs, it has been revealed that there is at least one local institution that will benefit a great deal from South Africa hosting the 2010 FIFA World Cup. The South African Revenue Service (SARS) could pocket some cash from foreign players during the tourney.

SARS were kind enough to grant certain tax concessions on goods and services that are needed for hosting the tournament, but international soccer stars will not be exempt from tax and certain measures have been implemented to ensure that these taxes are collected.

Typically, South Africa taxes its non-residents on a source basis. That means receipts from sources within the borders of the country are subject to tax.

Ultimately, that means earnings received by foreign players for activities they perform during their stay in SA will be subject to tax. Want Mr Messi in your local pizza advert? SARS will tax him and make sure you get them the money.

Foreign rugby and cricket players have previously avoided paying tax on their local earnings during World Cups, but according to the government department tax collecting problems have been rectified and Di Seccombe of audit, tax and advisory firm Mazars said SARS will be collecting in 2010.

The tax legislation now puts the obligation on any South African resident who is paying a foreign sportsman taking part in a "specified activity" to withhold tax at a rate of 15%. So, if you happen to find yourself doing deals with Didier Drogba or Alex Song - you will have to tax them on it.

"A 'specified activity' is defined in the Income Tax Act as any personal activity undertaken by the foreign sportsperson in South Africa, whether alone or with other people," said Seccombe.

In simple terms that means that any sort of activity that all the foreign soccer cronies might generate an income from, will be taxed.

"Any South African resident failing to withhold the correct amount of tax and pay it over to Sars within 30 days will find themselves personally liable for the taxes owing. Theoretically, the SA resident will then need to recover the taxes paid from the foreign sportsperson."

This echoes the sentiments of lawyer Pierre de Vos who last week said that the economic benefits of the World Cup will not be as high as people had hoped, not for the man on the street anyway...

Recent Articles

Featured Rating agencies may come knocking

It is only the middle of February, but the rand has already made two big moves. The first was the rand moving from R14.60 to R 13.20 at the beginning of the year, as emerging markets (EM) became fashionable again. The second was where the rand gave away nearly 90 cents in 2 weeks as the EM rally ran out of steam, and local events started to hit the headlines.

Read more

The cost of sending money home to neighbouring countries

Transferring money home within the Southern African Development Community (SADC) provides vital financial support for many households in neighbouring countries.

Read more

Student bank accounts: Which come out on top?

Being a student signals budgeting and not having a lot of money at your disposal. This means streamlining expenses such as your grocery costs and entertainment budget. But what if your bank account is in fact costing you more than you can afford?

Read more

Can you afford an ambulance in South Africa?

When a loved one is straddling the line between life and death, you won’t hesitate to call an ambulance. This week, Justmoney found out how much an ambulance ride costs in South Africa, whether you can refuse to get into an ambulance, and who pays the bill if you’re unconscious. 

Read more

Sign Up

To our weekly newsletter for advice you can bank on

Deals

President Hotel Easter Special

Price: From R1,500
When: 15 March to 30 April
Where: Cape Town

Kulula-Preskil Island Resort Special

Price: R16,999
When: 11 May -14 September
Where: Mauritius

A Touch Of Madness Tuck In Tuesday Special

Price: R70
When: Tuesdays
Where: Cape Town