By Tanya Tosen, Master Mobility & Tax Specialist at Tax Consulting SA; and Zainab Bouziane, Expatriate Solution Specialist at Xpatweb
Because of digital advances, in part fuelled by worldwide lockdowns and social distancing, there are many professions that no longer require staff to be permanently office-bound. Consequently, the number of conversions to remote working platforms have resulted in professionals conducting their business while travelling. However, things become complicated when the lines are blurred between working remotely and holidaying with the family.
For those who are planning a holiday with the intention of working remotely at the same time, there are two alarming factors at play. These two factors need to be dealt with carefully to avoid legal recourse by either the country they visit, or their home country.
What type of visa to apply for?
Tourism visas are issued exclusively for tourism purposes. If you are planning to do work on your holiday, then you are no longer there exclusively as a tourist. While many remote employees take advantage of this grey area created by the pandemic, the hard truth is that you could be breaking immigration laws.
If found to be in contravention of these laws, you could be arrested in the foreign country and your visa suspended. Not only will authorities ask you to leave the country immediately, but you might be barred from entering the country again.
Before setting off on your holiday, check to see if the country you intend to visit offers a remote work visa, which are often referred to as a digital nomad visa. These visas are unique to each country and can be impacted by the individual applying for them.
While your family can travel on a tourism visa, you might have to stay on a remote working visa for the duration of your trip. If that is required to adhere to the host country’s immigration laws, then it is better to overcome this hurdle prior to entering the country.
What country to pay tax in?
One of the more pertinent questions to ask, is which country has the right to tax you on the income earned while working remotely? Few travellers are aware that there might be serious tax implications involved.
Should you be rendering your services abroad, you may be faced with the situation that you could be liable for personal income tax in the country you are working in. Unfortunately, this does not change if you are on holiday with your family and plan to do a bit of work on the side, whilst visiting another country.
If the country you are visiting has a Double Tax Agreement (DTA) in place with South Africa, then you may qualify to apply for tax relief under the DTA thereby not necessarily becoming immediately liable for personal income tax in the country you are visiting. However, should the country you are visiting have no DTA in place, you may be liable for personal income tax from day one. In essence, one should be aware that this situation can quickly become complex. It is not always a clear-cut, straightforward case. It all depends on the merits and facts of each individual’s unique circumstances.
Get the right advice before you start planning your trip
It is important to note that you could be asked to provide proof of employment and proof of income. These requirements change depending on the country you intend to visit. Tax or immigration laws are country-specific and need to be carefully assessed by a professional immigration consultant or an experienced tax specialist, who has specialist knowledge in assisting individuals working remotely while abroad.