Bulletin | September 2, 2025
Update – Proposed Tax Amendments for Foreign Pension Income Exemption Post the 2025 Budget
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The Draft Taxation Laws Amendment Bill, 2025 has been published and is currently open for consultation.
As noted in the last South African Budget Speech, the proposal is to remove the tax exemption on Foreign Pensions where such pensions have been accrued because of services rendered abroad.
What this means is that where an individual worked abroad and their employer made contributions to the pension in respect of their employment (i.e., under a contract of employment), such pension income, when received by a South African tax resident, will no longer be exempt.
For the avoidance of doubt, this has no bearing on Foreign Personal Pensions or Retirement Plans funded by contributions made by the Member, where income from these Plans is already subject to tax in the hands of the Member, based on the nature of the income (i.e., capital gains tax (CGT) on gains, income tax on annuities, etc.).
Authored by
Rex Cowley, MCIM, MSc, Adip Int Tax, BTech M
Director, Overseas Trust and Pension
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