EMIGRATION PROCESS HIGH LEVEL – The Bank redirect you to SARS
We often forget or take for granted that South Africans are subject to exchange control and restrictions on transferring funds abroad. This is more stringent for non-residents and when one emigrates, and keeps an interest in South Africa thereafter, one becomes subjected to the non-resident blocked bank account experience.
A spike in interest for emigration has arisen, out of the pressure from South African Banks to prove one’s tax compliance. This is not well explained, but banks are responsible for FICA, and ensure they have your correct address details.
When a bank discovers that you are no longer resident, and you live abroad - they should change your banking profile to a Non-resident blocked account. In order to do this, you need to prove SARS tax compliance. A letter of good standing does not suffice. You need to currently engage in two processes with SARS:
- Application to Cease to be Tax Resident and be subject to ‘an exit tax event’, and
- Application for Approval for International Transfers (AIT)
Once completed and a letter is received from SARS confirming you Cease to be Resident, the bank can change your status.
More so, each person is allowed to repatriate their wealth declared and subjected to tax being settled. However, the SARS process to change residency takes several months plus, and by the time one makes a second application to repatriate wealth (already subjected to exit taxes) – formerly TCS and now AIT, the wealth has changed. So, an entire new application needs to be made, and material differences that may have arisen need to be explained.
What makes this process real for most is when they receive an Estate distribution, proceeds from the sale of property in South Africa, Payments from retirement products like pensions, provident and RAFs, or payments from life annuity products. All of these make their way to your bank account, and then are ‘blocked’ until you have SARS compliance…
The current system is well structured and few can escape CEASING TO BE TAX RESIDENT and the AIT application, should they wish to externalise moneys.
The challenge is that the exit process takes time, because SARS performs two levels of checks for Ceasing to be resident applications and each application is unique. The second test conducted is much wider and includes a person’s links to family members, trusts, companies, CCs, partnerships and properties… to name a few supplied by third party data.
If you are looking to Cease to be Resident, ensure that you deal with a specialist in this field, who has kept up to date with the latest changes… ACS PLUS can assist you successfully navigate this challenging process. We deal with all matters SARS in this process.
Comentarios