Starting March 1, 2021, the Financial Emigration process in South Africa saw major revisions. Formerly overseen mainly by the South African Reserve Bank, it ceased due to the removal of outdated exchange control legislation. Consequently, the new Financial Emigration process places a stricter emphasis on tax residency and the necessity to prove non-resident status.
GET YOUR NON-RESIDENT TAX STATUS LETTER TODAY!
The SARS Letter of Confirmation for Non-Resident Tax Status affirms that an individual is no longer recognised as a tax resident of South Africa, stating the date when tax residency ended.
To obtain this letter, individuals must undergo the new Financial Emigration process (Tax Emigration).
Following completion, SARS will provide this confirmation letter validating non-residency for tax purposes
WHY CHOOSE US
Leap Group provides tailored services to individuals aiming to terminate their tax residency status with the South African Revenue Service (SARS).
With over 7 years of diverse experience, Leap Group upholds exceptional service standards, offering expert advice and facilitating comprehensive tax compliance services.
WHAT SETS US APART
CHANGES TO THE FINANCIAL EMIGRATION PROCESS
THEOLDFINANCIAL EMIGRATION PROCESS
SARB MP336(b) form, application and submission to relevant banking institution
The process involved applying for an Emigration Tax Clearance Certificate along with supporting documents verifying non-resident status
The necessity for an authorized dealer to validate the application
Requirement for approval from the South African Reserve Bank before finalizing the application
Outdated limitations on bank accounts once converted to non-resident status
Applying for a Notice of Non-Resident Tax Status letter from SARS, including supporting documents verifying non-resident status
Calculation of an "exit tax" on global assets, as per section 9H of the Income Tax Act
Approval of International Transfers (AIT) application from SARS for money transfers exceeding a specified threshold
FREQUENTLY ASKED QUESTIONS ON FINANCIAL EMIGRATION
Is it possible to hold a bank account and own properties in South Africa if I financially emigrate?
Yes, you can possess any asset in South Africa and a bank account if you intend to financially emigrate
What are the benefits of Financial Emigration?
No requirement to declare or pay tax in South Africa on foreign earnings and investments.
- Full surrender of RAs permitted.
- Simplified transfer of proceeds abroad from assets left in SA.
- Simplified transfer of future inheritance from South Africa.
Will I lose my South African residency or citizenship if I undergo the Financial Emigration process?
No, the financial emigration process is solely for tax purposes and involves only an application to the South African Reserve Bank (SARS). It has no impact on your residency or citizenship status with the South African Home Affairs.
Do I still need to submit tax returns in South Africa if I have undergone financial emigration?
Yes, if you still possess assets in South Africa (properties, policies, bank accounts, shares, etc.), you are required to file tax returns in South Africa, declaring any income sourced from South Africa. If there is no income sourced from South Africa, then nil returns are applicable. If you have no remaining assets in South Africa, you can deregister from tax only after completing the financial emigration process.
Can I backdate my Financial Emigration to when I initially left?
Yes, Financial Emigration can be retroactively applied to the date of your initial departure from South Africa.
Are there restrictions on the amount of days per year I can visit South Africa after Financial Emigration?
Yes, after Financial Emigration, it's important to avoid re-establishing tax residency through the physical presence test upon returning to South Africa
If circumstances lead me to return to South Africa to live and work again, can I undo the Financial Emigration process?
Upon your return to South Africa, the Financial Emigration process will be reversed. You will not be required to pay tax on your foreign income for the years you were abroad. You will be considered a tax resident again as of your return date to South Africa and will be taxed on worldwide income from that point onwards.
