South Africans residing or working overseas can now not keep away from the lengthy arm of the South African Income Service (SARS), says Jonty Leon, authorized supervisor at Tax Consulting SA.

Beneath stress to fulfill its income quotas, Leon mentioned that the tax authority has began auditing the nation’s non-compliant expatriates in earnest.

“We’ve got been warning expatriates that this was coming and now that it’s right here, the time for hiding one’s head within the sand is over,” he mentioned.

He advises these meaning to relocate to a different nation to observe the formal exit procedures and, most significantly, guarantee their tax affairs are so as beforehand.

Leon mentioned that that people who have already left completely, ought to make sure that they’ve achieved so in a compliant method, and have had themselves famous as non-resident for tax functions.

Whether or not a South African should declare their worldwide earnings and pay tax on it to SARS is decided by their tax residency standing, not their bodily location or interval outdoors the nation.

“Tax residency of South Africa shouldn’t be decided solely on the period of time spent within the Republic, this can be a way more advanced problem which have to be technically handled when it comes to the regulation,” Leon mentioned.

The most secure path to take away ambiguity on tax residency standing is to observe the formal monetary emigration course of. This course of is being modified and a brand new extra stringent regime can be carried out from 1 March 2021.

This may occasionally come as a shock to those that imagine that, as soon as they set foot on international soil, they’re free from any additional tax obligation to South Africa. Extra so for many who left the nation with out settling their tax debt, even when they’ve been gone for many years.

“With stricter laws to again its efforts and an rising system of world monetary information sharing as wind in its sails, SARS is greater than able to detecting taxpayers who traditionally flew below its radar,” mentioned Leon.

Warning indicators

In accordance with Leon, a number of warning indicators arose over the previous yr forward of this modification.

The primary was modifications to the expatriate tax legal guidelines that got here into impact on 1 March 2020, quickly after SARS launched its devoted Overseas Employment Unit, which is targeted on South Africans working overseas.

The second warning was the announcement that the present monetary emigration regulation can be amended, which previously has been profitable in confirming with SARS and SARB one’s non-resident standing.

The change will inherently make it harder to stop tax residency and with a brand new and, as but, undisclosed substitute course of on the horizon, there was an inflow of purposes to beat the deadline.

The third signal was the elimination of the time period “wilfully” from the Tax Administration Act when coping with non-compliance, giving SARS larger leverage to prosecute anybody claiming negligence when failing to fulfill their tax obligations.

That is according to the reasoning for the change within the expatriate tax laws beforehand, the place the rife tax non-compliance of South Africans overseas was famous throughout Parliamentary periods in August 2017.

Lastly, SARS has begun a two-pronged assault technique:

  • Firstly, by way of audits calling for particular person expatriates to show they’re non-residents and justify their intentions – some audits calling for proof that the taxpayer had obtained an Emigration Tax Clearance Certificates when leaving South Africa;
  • Secondly, by audits on offshore earnings revealed by way of the frequent reporting customary (CRS). In accordance with Leon, this comes as no shock, as SARS is focusing on those that have traditionally been in a position to “cover” property and funds, however which can now not be doable as a result of trade of knowledge between jurisdictions.


Leon mentioned expatriates and people wishing to to migrate nonetheless have a number of choices obtainable to them.

For one, they will urgently apply for monetary emigration till March 2021. “Nationwide Treasury confirmed that purposes submitted previous to that date can be processed below present laws,” he mentioned.

They’ll additionally reap the benefits of any double tax settlement between their chosen nation and South Africa. Because the tax implications of such agreements range between jurisdictions and the truth that these agreements don’t apply mechanically to the taxpayer, they need to search recommendation from an expatriate tax knowledgeable.

Above all, if an expatriate shouldn’t be tax compliant, they will strategy SARS below the Voluntary Disclosure Programme to pay their again taxes together with curiosity and penalties however with out prosecution.

This course of should even be undertaken very fastidiously, as particular necessities have to be met.

“SARS has the benefit now, so ready to see what occurs is a plan of action I don’t advocate,” mentioned Leon.

Learn: Authorities to take a look at fundamental earnings grant for South Africa: Ramaphosa

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