Tax changes impacting South African Superyacht crew

14th Oct 2019

South Africans are applying for EU passports in record numbers

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More South African nationals are making the decision to apply for EU passports in a bid to avoid the increased tax proposals.

The legislation hasn’t yet changed, but March 2020 is the planned date for the South African ‘expat tax’ changes. The government wants to significantly increase the amount of tax collected from nationals over the coming years. They plan to achieve this by amending the South African Income Tax Act. One immigration firm has seen a 364% increase in the number of applications since 2018.

The increased number of passports is in part due to the opportunity to obtain an EU passport when South African nationals commit to investing at least €250,000 in the respective EU country. Currently, Cyprus, Greece, Malta and Portugal are seeing the steepest increases in applicants.

changes in the SA tax laws

The new law is set to change how much tax must be paid on income earned overseas. We have written about this issue on a number of occasions. Previously, South African Superyacht crew benefited from tax exemption on income earned abroad. From March, only the 1st R1million earned whilst onboard will be exempt from tax in South Africa. This is still privy to the offshore rule that more than 183 days must be spent outside the country in any 12-month period.

There are a variety of tax opportunities that have opened up over the months. We recommend that South African Superyacht crew speak to an advisor to determine the best approach for their situation. For example, it is unlikely that junior crew will have the investment capital required for an EU investment, so other solutions will be more appropriate.

Next steps for South African superyacht crew

Donné Trump of Seafarers Global, states,

It is imperative that as long as you are a South African tax resident or have income or assets in South Africa, you must be registered for tax. As a tax resident, your worldwide income must be declared to SARS and seafarers have their very own exemptions in place, to ensure they acquire the relevant tax relief.”

You can learn more about how to declare yourself to SARS on their website HERE.

As with any tax declaration, the more you have and the longer you delay, the worse the likely consequences. There are a number of South African yacht crew who have undeclared assets in SA. It is important to get these declared as soon as possible to avoid additional fines.

Common Reporting Standards are making assets more transparent. This means failure to disclose assets is likely to catch up with crew sooner rather than later.


Tom Vjestica