There are many myths and misconceptions surrounding the tax obligations of South Africans living abroad. Some people think that simply by moving overseas and no longer being physically present in the Republic, that they are automatically relieved of their tax obligations. This leads them to believe that deregistering their tax number with the South African Revenue Service (SARS) is their next logical step in cutting their ties with the tax authority entirely. However, this is not the case. It is essential to understand that deregistering with SARS is not the way to terminate your income tax liability, and it should not be seen as a means to avoid filing tax returns in South Africa and having to declare your worldwide income.
What’s the big deal about deregistering your tax number?
Attempting to deregister for income tax with SARS without following the proper procedures can have unwanted legal consequences, particularly where you have not shown SARS that you have grounds to terminate your tax obligation. Think you can ghost SARS once you’re overseas? Not so fast. SARS has the authority to prosecute individuals who either provide inaccurate information about their whereabouts or claim to be unreachable. In certain cases, SARS has even been known to use social media platforms like Instagram and Facebook, as well as communication channels like WhatsApp or email, to serve legal actions. There is no escaping the long arm of the tax authority in the digital age.
Read more: SARS Alert: financial emigration doesn’t automatically make you a tax non-resident.
Who qualifies for income tax deregistration in South Africa?
To qualify for the deregistration of your personal income tax number with SARS as a South African living abroad, you must meet the following requirements:
- Maintain a fully compliant tax profile with SARS at the time of deregistration, with no outstanding or overdue returns, debts, or refunds.
- Possess no remaining assets in South Africa, including shares, trusts, properties, policies, companies, and bank accounts within the country.
- Be officially confirmed as a non-resident by SARS, which is done through the completion of the tax emigration process.
- Hold a valid Tax Residency Certificate from the foreign jurisdiction, where applicable.
Tax emigration from South Africa
As you can see, before you can deregister yourself as a taxpayer in South Africa, there are a few things you need to take care of first. Starting with tax emigration. Tax emigration is how you’ll cease your South African tax residency. It is a critical step as you will need to prove to SARS that your foreign income and assets are not subject to taxation in South Africa. If your foreign income remains taxable in South Africa, it must be declared on annual tax returns, and you will not be permitted to deregister for tax.
- How to declare foreign income on tax return to SARS
- How much foreign income is tax free in South Africa?
It is critical to ensure that your application for the cessation of tax residency is handled correctly, especially if your intention to leave South Africa is permanent.
- Breaking tax residency with South Africa: what you need to know about the SARS Declaration of Cease to be a Tax Resident
Once all the necessary formalities are completed and approved, and you have no further taxable income or assets in South Africa, you should receive confirmation from SARS of your non-resident status, which means you can then proceed with the deregistration process.
Read more:
- How do I get my money out of South Africa via tax emigration?
- What you need to know about how exit tax is calculated in South Africa
How long does it take to deregister my income tax number with SARS?
Unfortunately, the process of deregistration can be lengthy and take anywhere from 3 to 18 months to finalise. This extended timeline is primarily due to the sizable backlog of deregistration applications. In most cases, SARS needs to first conduct an audit to confirm that all the necessary criteria are met, before the deregistration can be approved, which can be time consuming.
FinGlobal: cross-border financial specialists for South Africans abroad
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To see how FinGlobal can help, leave your contact details below and we’ll be in touch to discuss your requirements.
FAQs
To qualify for the deregistration of your personal income tax number with SARS as a South African living abroad, you must meet the following requirements: Maintain a fully compliant tax profile with SARS at the time of deregistration, with no outstanding or overdue returns, debts, or refunds.
How to deregister as a South African taxpayer? ›
The taxpayer must apply at CIPC for deregistration before SARS can proceed with deregistration. CIPC requires you to be Tax Compliant before they consider your application therefore it is important to ensure your tax compliance with SARS. Proof of deregistration from CIPC must be presented to SARS.
How to end your tax residency in South Africa? ›
The Declaration form must be completed and be submitted with the relevant supporting documentation through eFiling or SOQS upon the taxpayer informing SARS that s/he ceased to be a tax resident on the RAV01. If you are not registered yet on eFiling, you may continue to use the contactus@sars.gov.za email address.
How to tax emigration from South Africa? ›
When completing tax emigration from South Africa and remitting funds abroad, part of the process will include applying for an Approval International Transfer (AIT) from SARS, formerly known as an emigration tax clearance. In order for your AIT to be issued by SARS, your tax profile must be compliant.
Can I delete my SARS profile? ›
A taxpayer's profile can only be deleted by the tax user from the profile provided that • All tax types linked to the taxpayer have been deactivated; • There must not be any pending tax type transfer requests for the associated taxpayer; and • The taxpayer must not be the only one linked to the user.
How long can a permanent resident stay outside South Africa? ›
It is also worth noting that a permanent residency holder may lose their permanent residence if they are out of the Republic for a duration of longer than three years, do not adhere to the conditions on their permanent residency permit or commit a schedule 5 or 6 offence.
What is exit tax in South Africa? ›
Exit tax when you leave South Africa
In South Africa, CGT is not a flat rate. A portion gets added to your other income for that tax year and you're taxed in your tax bracket. The CGT rate can range from 7.2% to 18% depending on the tax bracket you're in.
What is the 183 day rule in South Africa? ›
Non-resident individuals are exempt from income tax unless the individual is physically present in South Africa for more than 183 days in aggregate during the year preceding the date on which the interest accrues or the debt on which the interest arises is effectively connected to a PE in South Africa.
Does a non-resident have to pay tax in South Africa? ›
In South Africa, the tax system is based on residency. Residents are taxed on their global income, with certain exemptions, regardless of where the income is earned. Non-residents, on the other hand, are only taxed on income derived from a South African source.
How much money can a non-resident take out of South Africa? ›
For non-residents: Remaining R100,000 cash: Non-residents, having ceased tax residency, can remit the remaining cash balance, up to R100,000, abroad on a once-off basis without SARS approval. This facilitates closing bank accounts and deactivating tax numbers.
The amendment requires South African tax residents abroad to pay South African tax of up to 45% of their foreign employment income which exceeds the threshold of R1. 25 million.
How do I claim tax when I leave South Africa? ›
Present your claim at the VAT Refund Office. VAT Refund Offices are located at O R Tambo International Airport – Johannesburg, Cape Town International Airport and King Shaka International Airport – Durban. The location of the VAT Refund Office is clearly sign posted. – TAX INVOICES that have been stamped by Customs.
How much money can you take out of South Africa when emigrating? ›
How much money can I transfer out of South Africa? South Africa has strict foreign exchange controls that allow the South African Reserve Bank to keep track of the outflow and inflow of capital in South Africa. You can transfer a total of R11 million a year using your allowances.
How to deregister for income tax in South Africa? ›
If for any reason you are no longer required to be a provisional taxpayer, you can follow these steps to Deregister:
- Log into your eFiling profile;
- Click on "Home";
- click on "Tax Types" and then click on "Manage Tax Types";
- Tick the box next to "Deactivate" and then click on "Submit".
Taxpayers with smart phones and internet have access to more services including WhatsApp, SARS MobiApp, Live Chat and 'Ask SARS a question'. For more detail on all mobile services available on both smart and basic phones, see the online Guide to SARS Mobile Tax Services.
Can SARS block your account? ›
In terms of the Tax Administration Act (TAA), SARS can only freeze the money in your account if it has notified you that you owe it money and that it is making a final demand.
Is it possible to deregister a company in South Africa? ›
If your company or close corporation ceases to operate, you may deregister it with the Companies and Intellectual Property Commission (CIPC). It can also be dissolved as result of liquidation.
Is it possible to deregister for VAT in South Africa? ›
A vendor may apply in writing for cancellation of a VAT registration where the value of taxable supplies will be less than the compulsory registration threshold of R1 million in any consecutive period of 12 months.
Do I have to pay tax in South Africa if I live abroad? ›
South Africa has a residence-based tax system, which means residents are, subject to certain exclusions, taxed on their worldwide income, irrespective of where their income was earned. By contrast, non-residents are taxed on their income from a South African source.
