Editorial

• Pages: v-vii
• DOI: 10.10520/ejc-btclq_v13_n1_a1
• Author: Milton Seligson SC
• Published date: 01 March 2022
• Date: 01 March 2022

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Editorial

MILTON SELIGSON SC

This issue of the BTCLQ contains four articles that discuss a miscellany of

tax problems arising from provisions of the Income Tax Act 58 of 1962

(‘the ITA’) and the Value-Added Tax Act 89 of 1991 (‘the VAT Act’).

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The f‌irst of these articles is by David Clegg, a tax consultant who thinks

deeply and writes perceptively about tax. It deals with the source of the

earnings of employees who carry out their duties remotely from locations

that may be far removed from the place where their employer is located —

an increasingly common phenomenon in the modern age. A combina-

tion of the COVID-19 pandemic and technological advances have made it

possible for many employees to perform their work ‘remotely’, i e away

from the location of their place of employment.

The article discusses the question whether the source of the remote

worker’s earnings from such work is the work itself done in the remote

location, or the delivery of that work at the employer’s off‌ice or place of

business. The answer to this question can be of vital importance in deter-

mining the tax liability of the employee when, as may often be the case he/

she works from a tax jurisdiction different to that in which the employer is

located. The tax position is considered from the perspective of a UK-resident

employee of a UK-based company who has relocated to Cape Town tempo-

rarily to perform his/her work remotely in South Africa.

The case is discussed of an employee-director, whose services would

usually be considered to be rendered at the location of the company’s head

off‌ice where the services of directors are normally delivered. In the case of

an employee who is required to deliver the work product to the employer,

the author considers that the source of the earnings would also be the

place where delivery is required by the employer, whether in electronic or

other form. The article considers the position of an independent contractor

remotely rendering services to his/her client, where the place of delivery

would not necessarily be the source of the income, unless that is a require-

ment of the client.

The author concludes that the source of a remote employee’s earnings

would be generally located at the employer’s enterprise or establishment

where the work is done or orchestrated, though each case will depend

on its own facts. In the hypothetical example used as an illustration, the

author considers that the source of the earnings would be the UK and not

South Africa.

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