Reference no: EM133101780
Question - Malik Bouman is 47 and a Netherlands national. He has been coming to South Africa on a series of freelance work contracts for a number of years. Malik has just begun a sixth contract which will last for a period of four years. This contract requires 85 days of presence, including weekends but excluding holidays, in South Africa every six months. The contract start date was 10 November 2018 with his first 85 days of presence commencing immediately. Until Malik started the contract on 10 November 2018, he had spent no days in South Africa in the 2019 year of assessment. On 2 February 2019 (day 85), Malik left South Africa and returned again on 1 May 2019 to start the second 85 day period of presence. Malik's previous time in South Africa was as follows: Tax 3247 May 2022 A 4 Year of assessment Days of presence in South Africa 2018 355 2017 109 2016 231 2015 120 2014 101 After this contract is concluded, Malik intends to return permanently to the Netherlands and seek work in Europe. Malik had the following income and expenses for the 2019 year of assessment:
(i) Income from the freelance contract in South Africa - R500,000
(ii) Rental expense in respect of South African accommodation - R30,000
(iii) Food and other domestic expenses - R50,000
(iv) Client entertainment expenses - R65,000
(v) Flights - within South Africa for work - R16,000
(vi) Flights - business expense of international return for the contracted periods in South Africa - R37,000
(vii) Interest received on South African bank account - R5,000
(viii) International medical aid scheme contributions (for Malik only) - R100,000 per annum
Required -
(a) Explain whether or not Malik is resident in South Africa for income tax purposes for the 2019 year of assessment. Note: Your answer should address all of the criteria for residence.
(b) Calculate the South African income tax liability of Malik for the 2019 year of assessment. Note: You should indicate by the use of zero (0) any amounts which are not taxable or not deductible.