Guiding consumers since 2009

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 Everything you should know about tax auto assessment

In 2019, the South African Revenue Service (SARS) launched a system, which was dubbed an “auto assessment”, to assist taxpayers with their annual tax returns. But what does this system entail, and how will it impact you?

What does it mean to be a registered Financial Services Provider?

You may have noticed that financial institutions state that they’re registered Financial Services Providers (FSP). But what does this actually mean, and how does this benefit you as a consumer?

Should the retirement age change?

Across the world, people are retiring later than they used to. However, retirement products are centred around set retirement ages at which point you’d be able to access your retirement savings. But how applicable is the current retirement age in South Africa?

Everything you need to know about wills

Death can leave a lot of confusion and chaos. What happens to your possessions when you die can have a profound effect on those you leave behind. But you can soften the impact by drawing up a will.

Deals

Get 30% off your gym membership with Absa student account

Price: Available on request
When: Daily
Where: Nationwide

Get 10% discount on Rentalcars.com

Price: Available on request
When: Daily
Where: Worldwide

Get up to R5 back in rewards points when buying fuel

Price: Available on request
When: Daily
Where: Nationwide


Latest Guide

Guide to debt rehabilitation solutions