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SARS tax compliance status for transferring funds abroad – what’s changed?

SARS tax compliance status for transferring funds abroad – what’s changed?

May 13, 2024


As a South African expat living abroad, managing your finances in more than one country shouldn’t be a source of anxiety for you. But, with the South African Revenue Service (SARS) and the South African Reserve Bank (SARB) currently in the thick of overhauling our nation’s aged exchange control policies and procedures, the rules are changing fast. Scared you’re going to miss an important change relating to the repatriation of your money from South Africa? Don’t want to make a mistake that could cost you? Let’s take a look at some recent developments you need to be aware of when looking to make an international money transfer from South Africa.

The SARS process for Approval of International Transfers

On the rules front, there has been a shift in focus to tax compliance in the movement of money in and out of South Africa. As such, SARS is stepping up to play a bigger role (particularly in repatriating money from South Africa) safely and legitimately. In order to transfer more than R1 million out of South Africa, it is now necessary to obtain approval from SARS before the transaction can be completed.

What is the SARS AIT process?

The SARS Approval for International Transfers (AIT) process is a system introduced by SARS to oversee and regulate the transfer of funds exceeding R1 million out of South Africa. It streamlines the previous “Emigration” and “Foreign Investment Allowance” procedures into a single application for the purposes of SARS tax compliance status verification.

The SARS AIT process introduces several new features to the TCS system:

  • Unified application: A single AIT application replaces the need for separate “Emigration” and “FIA” PINs.
  • Verification option: The “Tender” option for third-party verification is eliminated. Now, the “Good Standing” option is the only choice.
  • Increased documentation: Applicants must provide more supporting documents for their AIT application.
  • Asset and liability disclosure: Both local and foreign assets and liabilities must be disclosed at their cost value.

Benefits of the new SARS TCS system

The enhanced SARS TCS system was launched in April 2023 with the aim of simplifying tax compliance for everyone, regardless of tax resident status. It strengthens compliance checks across various entities, including government, businesses, and individual taxpayers. While it may appear stricter, the goal is to fast track approvals for compliant individuals and identify potential non-compliance issues early on.

The additional information required with the AIT application helps SARS ensure all taxes are paid and raises any non-compliance flags upfront. This aligns with their goal of encouraging voluntary compliance and streamlining the process for everyone involved.

The new AIT process reflects SARS’ strategic focus on ensuring tax compliance by tracking the movement of funds. They are now interested in:

  • Source of funds: Where the money you intend to transfer originates from.
  • Financial standing: A detailed statement of your assets and liabilities (at cost and market value).
  • Destination of funds: Where the money will be transferred to.

Who needs to apply for an AIT?

South African tax residents planning to transfer more than R1 million out of the country in a calendar year must apply for an AIT. Additionally, taxpayers who have ceased their South African tax residency and intend to transfer funds internationally from a South African source also require an AIT.

When do you not need an AIT TCS PIN to transfer money out of South Africa?

Tax residents transferring amounts within the Single Discretionary Allowance of R1 million per year do not need an AIT PIN.

Obtaining a TCS PIN for Approval of International Transfers

SARS requires a Tax Compliance Status (TCS) PIN for international transfers larger than R1 million. Here’s how to obtain your PIN:

1. You can use the SARS Self-Service options:

  • eFiling: Access the eFiling platform and initiate a Tax Compliance Status Request. Choose the “Approval International Transfer” option and complete the required details. Electronic submission typically results in faster processing.
  • SARS Online Query System: You can also utilise the online query system to request your TCS PIN, which verifies your compliance status with SARS’ platforms.

2. You can seek professional assistance: Consider seeking assistance from a qualified tax or accounting service provider. They can request the AIT TCS PIN and conduct all the paperwork on your behalf with your authorisation. This option is helpful if you’re unfamiliar with the process (and you want to avoid making any mistakes) or you simply prefer expert guidance.

What is the SARS AIT process for non-residents?

The procedure is the same as for tax residents, with a few extra steps. If you have already broken tax residency before requesting a TCS PIN, it is necessary to ensure you’ve gone through the formal “cease to be a resident” process with SARS successfully, as verification of your tax residency status is part of the AIT paperwork requirement.

What supporting documents must be submitted with a SARS AIT application?

The specific procedure and required documents that must accompany your application to SARS will vary depending on your individual circumstances and the type of international transfer. In order to avoid having your application denied, it is vital that you meet all SARS requirements and complete the process accurately, or you can expect delays and complications.

Read more: What supporting documents does SARS require with the Approval of International Transfers (AIT) application?

FinGlobal: cross-border financial specialists for South Africans

Ready to ditch the stress and hand all the paperwork over to the experts? We’ve got you covered. FinGlobal is a Licensed Treasury Outsourced Company with the South African Reserve Bank (SARB) and this, along with our strong working relationship with SARS means we’re perfectly positioned to handle your international money transfers, from start to finish. We’re also ready to assist in matters of tax clearance, tax refunds and retirement annuity withdrawals.

To find out how FinGlobal can help you repatriate money from South Africa safely, securely and in a time-efficient, tax-compliant manner, simply leave your contact details in the form below and we’ll be in touch to discuss your requirements.

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