- Tax Consulting SA experts have warned South African expats that confusing terminology around tax residency is putting them at serious compliance risk.
- Experts pointed out that SARS has replaced the Reserve Bank as the authority responsible for verifying and recording the tax residence status of taxpayers from March 2021.
- South Africans living abroad who still have property, investments or bank accounts in South Africa will face real consequences if their SARS records are not up to date
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South African expatriates are being urged to stop getting bogged down in conflicting jargon and focus on the one thing that really matters: ensuring SARS They have accurate records of their tax residence status. This warning comes from Tax Consulting SA's legal manager of cross-border taxation, Delano Abdol, expatriate tax assistance specialist Asamkele Tyala and Carmen Sevenster.
What is causing the confusion?
Three experts say the influx of self-proclaimed consultants, AI-generated content and even some qualified lawyers has created an environment where South Africans living abroad are receiving contradictory guidance. Terms like 'tax emigration', 'Divorce SARS', 'ceasing tax residence' and 'financial emigration' are in vogue, yet they describe the same legal process under the same section income tax act.
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What migrants really need to do
From March 2021, SARS replaced the South African Reserve Bank as the primary authority for verifying and recording tax residence status. A South African registered as a tax resident must update that status with SARS before their bank can process any related exchange control requirements.
There are two legal ways to close South African Tax residence: proving that you are no longer ordinarily resident in South Africa, or demonstrating that you are exclusively tax resident in another country under a double taxation agreement. Simply stating your intention to leave is not enough. according to daily investorSARS will assess all relevant facts before reaching any conclusion.
Why does it still matter from abroad?
Those who believe that SARS compliance is someone else's problem are taking real risks. Under the Tax Administration Act, providing false information to SARS can constitute a criminal offence. Furthermore, incorrect residence records mean that SARS can tax a person on their worldwide income rather than just their South African-sourced income.
Many expatriates also maintain strong ties to South Africa, whether through property, retirement annuities, inheritance or plans to return. For straightforward cases, professional assistance to regularize one's condition is available for less than R4,000. According to Abdol, Tyla and Sevenster, the goal is simple: get official confirmation from SARS recognizing your non-resident tax status, and keep it safe.
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Source: News in Brief