The emigration process is changing. From a Tax emigration point of view, 28 February 2021 is ‘allegedly’ the last date of emigration from South Africa, before ‘phase in’ commences. ‘Phase in’ includes the sharing of information between 46 alliance countries. Along with this alliance, a more uncertain and stringent tax emigration process will begin. As much as we have witnessed an appetizer (below), details of this new SARS Audit process will be made available, hopefully by February 2021, or during that tax year.
SARS now has a dedicated Foreign employment unit to execute the Expatriate exemption, which took effect 1 March 2020. This unit has already commenced identifying expatriates and have started with enforcement. Expatriates that do not formalise their tax residency with SARS will be subjected to a SARS Audit.
It is early days, but we already see SARS Audit requirements of expatriates to submit the following:
1) 12 months bank statement with all income and a description which reconciles with what was declared to SARS
2) Tax clearance and approval for immigration
3) Residency certificate
4) Identification of unsold property, what is the intention of holding this property
5) Airport tickets showing date of departure from South Africa to abroad, with the intention of not coming back to South Africa
What is new and clear is the requirement for 12 months of bank statements and a potential Income tax event. This is a starting requirement and may extend further back into the taxpayer’s past. With this new interest, Emigration has just become more costly for emigrants.
As suggested in earlier articles, try to action emigration as soon as possible. Audits are costly and tax emigration seems to have just moved to a new level.
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