If the declaration is made on the income tax return (ITR12), you will receive a request for supporting documents to substantiate the declaration you have made. The relevant information that must be supplied to SARS will depend on the basis on which you have ceased to be a tax resident.
If the declaration is made via the RAV01 form on eFiling, the Declaration form must be completed and be submitted with the relevant supporting documentation through eFiling or SOQS.
If you are not registered yet on eFiling, you may continue to use the contactus@sars.gov.za email address.
Standard requirements (To be submitted with all declarations)
The signed declaration indicating the basis on which you qualify.
A letter of motivation setting out the facts and circumstances in detail to support the disclosure that you have ceased to be a tax resident.
A copy of your passport/travel diary.
Specific requirements
In addition to the aforementioned information, also supply the following as applicable, depending on the basis you have ceased to be a tax resident in South Africa:
Qualifying basis 1: Cease to be ordinarily resident
The type of visa on which you have gone to the foreign country.
Where you have already taken up permanent residence in the foreign country, submit proof thereof.
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 that such property is being used for).
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 reason thereof.
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, the frequency thereof and the reason for undertaking such visits.
Qualifying basis 2: Cease by way of the physical presence test
Only the standard requirements must be supplied
Qualifying basis 3: Cease due to application of Double Tax Agreement (DTA)
A certificate of tax residence from the foreign revenue authority or a letter from the authority that indicates your status as a tax resident in that country.
24 May 2022
COMMENTARY ON ABOVE
This is a new start to the process by SARS.
It is nice to see a distinction between various types of emigration, being it immediate or for those who left many years ago, or for those who have presence in several countries and fall under the rules of a double taxation agreement. SARS now have 3 qualifying bases, with an immediate emigration seeming to be the most onerous for admin.
Again, this is a starting point to deal with the administrative documentation. SARS are looking to tax worldwide assets on exit.
QUALIFYING BASIS 1: There is a request to identify property in South Africa, and business interest in South Africa and investment in South Africa. In addition, to identify the location of your personal belongings. These categories represent the majority of assets where CGT might apply, on tax emigration or on sale of property.
In addition, SARS now asks for a certificate of tax residence… this is something new. It will be interesting for countries such as Dubai.
Details of family and social interests are also new and suggesting a much wider web for review… The location of personal belongings begs the question where a site visit might occur (similar to applications to register for Vat – in the old days).
QUALIFYING BASIS 2: THE PHISICAL PRESENCE TEST … 6 YEARS OR MORE AWAY FROM SOUTH AFRICA
A recap on the physical presence test….
James Whitaker – a Tax Partner at PwC South Africa, explains it well:
An individual is considered a South African resident if the individual is physically present in South Africa for more than 91 days, in aggregate, in the relevant tax year and each of the preceding five tax years, and also for more than 915 days, in aggregate, in the preceding five tax years.
If a person, who has become a South African resident in terms of this physical presence test, spends a continuous period of at least 330 days outside South Africa, then the individual ceases to be a resident from the date of the beginning of the absence from South Africa.
This basis is driven by time out of the country.
QUALIFYING BASIS 3: DOUBLE TAXATION AGREEMENTS FOR THOSE WITH A PRESENCE IN VARIOUS COUNTRIES AND TAX JURISDICTIONS
This is interesting and an applicable DTA needs to be reviewed first before even considering application. As always, I suggest the services of qualified tax practitioners, specialising in tax emigration.
To conclude this commentary, the stand out certainty is that more information will need to be provided to allow SARS to calculate and audit individuals wealth and a potential CGT tax in future.
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