How to Become A Non Tax Resident In South Africa

A non-resident alien is a foreigner who does not have a substantial presence in the South Africa., such as seasonal visitors. Non-residents are still required to file taxes if they have income in the South Africa.

Do non residents pay tax in South Africa?

A non-resident is only liable for tax in South Africa on income derived from a source within South Africa and capital gains arising from the disposal of immovable property or any interest or right to immovable property situated in South Africa.

Do expats pay taxes in South Africa?

The amendment requires South African tax residents abroad to pay South African tax of up to 45% of their foreign employment income where it exceeds the threshold of R1. 25 million. Although the R1. These options are based on the intention of the South African expatriate.

Do non residents have to pay state taxes?

You might have to file a nonresident tax return if you’ve earned money in a state where you don’t live, in addition to a resident tax return with your home state. But some states offer exceptions from this rule, and the federal government won’t let you be taxed on the same income twice.

How do I cease to be a tax resident in South Africa?

The determination of whether an individual ceases to be a tax resident in South Africa is based on the manner in which such individual has been a tax resident in South Africa.

If the taxpayer has been an ordinarily tax resident, it is a factual enquiry on whether or not that person’s subjective intention to cease to be ordinarily resident in South Africa and no longer make South Africa his or her real home, is supported by various objective factors.

What are the consequences if I have ceased to be a tax resident?

A deemed disposal for capital gains tax purposes takes place at the time when an individual breaks his or her tax residence. The individual will be deemed to have disposed of his or her worldwide assets, excluding immovable property situated in South Africa.

Once a person has ceased to be a tax resident in South Africa, such person is no longer taxed in South Africa on his or her worldwide income, but only on South African sourced income.

What is the purpose of such declaration?

The purpose of the declaration is to inform SARS of the change in tax residency that will impact the basis on which you will be subject to tax in South Africa and how your returns will be assessed going forward.

How to Become A Non Tax Resident In South Africa

Why would you want to become a non-resident for tax purposes?

As mentioned, our residence-based tax system means that residents are taxed on their worldwide income, no matter where it’s earned. So, if you’ve been working abroad for a number of years, you are required to declare your foreign earnings to SARS and pay income tax if your tax residency sits in South Africa.

If, however, your tax residency is assigned to another country, you will be considered a non-resident and only income sourced in South Africa can be taxed by SARS.

Bearing in mind that your tax residency status does not affect your citizenship, you will be considered a South African tax resident if you and your family ordinarily reside in South Africa – the “ordinarily resident” test.

You’ll also be considered a tax resident if you meet the requirements of the physical presence test. Meeting the requirements of either test means that you will be considered a South African resident by SARS, and thus subject to expat tax.

Factors that will be taken into account to determine whether a taxpayer has ceased to be a tax resident of South Africa:

The type of visa on which you have gone to the foreign country.

Proof of permanent residence in the foreign country (if applicable).

A certificate of tax residence from the foreign revenue authority or a letter from the authority that indicates that you are regarded as a tax resident in that country (if available).

Details of any property that you may still have available in South Africa. Indicate the purpose for which such property is being used.

Details of any business interest (e.g. investment and employment) that you may still have in South Africa.

Details of your family. Indicate whether any family members are in South Africa and the reasons therefor.

Details of your social interests (e.g. gym contract, recreational clubs and societies) and location of your personal belongings.

Details of any return visits to South Africa, their frequency and the reason for undertaking such visits.

What does it mean to financially emigrate from South Africa?

It’s a formal application you make with the South African Reserve Bank (SARB) to become a non-resident of South Africa for exchange control purposes. This change in status is purely an exchange control matter and has nothing to do with your tax residency status or your citizenship. You’re welcome to return to South Africa at any point.

While financial emigration will not affect your tax residency status, there are still a number of attractive benefits to having completed the process:

You’ll be able to easily access and transfer your South African funds abroad

You’ll be able to access and cash in your retirement annuity policies before maturity.

You’ll enjoy simpler remittance of inheritances sourced in South Africa.

What do you need to know about South African tax law for expats?

As a South African living (or planning to live) abroad, you need to determine if you are a resident or a non-resident and if you will be required to carry on paying tax in South Africa.

South Africa has a residence-based tax system. People who are residents of South Africa are taxed on their worldwide income, subject to a few exclusions, in South Africa. Non-residents are taxed only on their income from a source within South Africa.

The Income Tax Act defines a resident for tax purposes. It’s important to note that a resident for tax purposes is not necessarily a resident for emigration purposes.

You are a South African tax resident if you meet one of two tests

The ordinarily resident test or

the physical presence test and

you aren’t found to be exclusively a resident of another country for the purposes of the application of any tax treaty.
The ordinarily resident test is conducted first to determine residency. The physical test is only ever used if the answer to this test is negative.

How do I stop being a tax resident in South Africa?

An individual, who is resident by virtue of the physical presence test, ceases to be a resident when that person is physically outside the Republic for a continuous period of at least 330 full days. The individual will be deemed to have ceased to be a resident from the day such person left South Africa.

Can I be a resident but not a tax resident In South Africa?

If you do not become tax resident in the South Africa your foreign income and gains do not become in scope of South Africa tax. If you are resident but not domiciled in the South Africa , there are special rules (known as ‘the remittance basis’) which might apply to your foreign income and gains.

How do I become a non tax resident In South Africa?

you are physically present in South Africa for 183 days or more in a tax year unless you convince the ATO that your usual place of residence is overseas; or. you are a member of a Commonwealth or public sector superannuation scheme, or you are a spouse or child under 16 years of such a person.

How do I know if I am a tax resident of South Africa?

It is important to note that you can be considered a tax resident just by your physical presence, without being an ordinary resident of a country. In this case you would have been present for at least 91 days/year, and at least 915 days in total, after a period of 5 years spent in the country.

How much must you earn to pay tax in South Africa?

R87 300 if you are younger than 65 years. If you are 65 years of age to below 75 years, the tax threshold (i.e. the amount above which income tax becomes payable) increases to R135 150. For taxpayers aged 75 years and older, this threshold is R151 100.

What is a non-resident for tax purposes in South Africa?

If the individual is neither ordinarily resident, nor meets the requirements of the physical presence test, that individual will be regarded as a non-resident for tax purposes. An individual can also become a non-resident by ceasing to be a tax resident in South Africa.

What is the minimum taxable income in South Africa?

Generally, if you earn less than R83,100 annually (or less than R128,650 if you’re older than 65), you don’t have to pay income tax. Additionally, you don’t need to file a return if all of the following are true: Your total employment income for the year, before tax, was less than R500,000.

Is the company resident in South Africa for tax purposes?

A company is resident in South Africa if it is incorporated, established, or formed in South Africa or has its place of effective management in South Africa. However, a company that is deemed to be exclusively resident in another country in terms of a double taxation agreement (DTA) is excluded from SA residency

How much tax do I pay on my monthly pension in South Africa?

Retirement & Death Benefits or Severance Benefits

Taxable income (R)​Rate of tax (R)
0 – 500 000​​0% of taxable income​
​500 001 – 700 000​18% of taxable income above 500 000
700 001 – 1 050 000​​​36 000 + 27% of taxable income above 700 000
​1 050 001 and above​130 500 + 36% of taxable income above 1 050 000

Who must file a tax return in South Africa?

People (individuals) whose earnings are above the tax threshold are obliged to register for income tax. For the 2021 year of assessment, the tax threshold amounts are as follows: R83 100 for individuals younger than 65. R128 650 for individuals 65 or older but younger than 75.