If you’re planning to leave South Africa for good, there’s a critical piece of paperwork you cannot overlook: a Non-Resident Tax Status Confirmation Letter from the South African Revenue Service (SARS). This letter is your golden ticket to ensuring you’re not taxed on your global income once you’ve ceased tax residency in South Africa.
Let’s break down why this matters and how to get it.
What is the SARS Non-Resident Confirmation Letter?
It’s a document issued by SARS that confirms you’re no longer a tax resident in South Africa. It proves that you have completed tax emigration from South Africa and that SARS is satisfied that you have squared away your tax obligations after your departure.
Read more: Who pays what? The key difference in income tax obligations between residents and non-residents.
How do I get a SARS Non-Resident Confirmation Letter?
To get this letter, you must meet specific legal requirements to be considered a non-resident for tax purposes. You’ll also have to go through a verification process with SARS that investigates your assertion that you have ceased to meet the requirements for tax residency (this process is known as tax emigration). Once they’re satisfied, they’ll issue the letter.
Read more: Understanding tax emigration from South Africa: a comprehensive guide.
Why is this letter so crucial for expats?
Until you have officially ceased your South African tax residency and become a non-resident for tax purposes, SARS is entitled to expect their cut of your global income, according to South African tax residency rules. So, even if you live and work abroad, you could owe taxes in South Africa if you don’t clarify your tax status with the revenue authority as soon as possible.
Until you have changed your status from resident to non-resident for tax purposes, you must use the foreign employment income exemption to have up to R1.25 million of your income earned abroad exempt from tax in South Africa.
Once you have your SARS Non-Resident Confirmation Letter, this is hard proof that your tax ties with South Africa have been officially terminated. This little document can save you thousands, so don’t overlook or lose it! Beyond tax benefits, this letter serves also to:
- Simplify international financial transactions: Streamline the transfer process internationally by providing proof of your non-resident status.
- Facilitate early access to retirement funds: In some instances, non-resident status can allow for earlier access to South African retirement funds.
- Strengthen your tax compliance: By obtaining this letter, you demonstrate your commitment to adhering to South African tax regulations.
Read more: Left South Africa without informing SARS? What now for your tax resident status?
How to apply for your non-resident tax status letter
Left or leaving South Africa for good? Here’s how to tell SARS you’re no longer a tax resident:
File the RAV01 form: Head to SARS eFiling or visit a branch (appointment needed) and complete the Registration, Amendments And Verification Form (RAV01). In the “Income Tax Liability Details” section, mark the date you stopped being a resident.
Prepare supporting documents: You’ll receive notice from SARS requesting documents to back up your claim. Documents typically include:
- Signed Declaration of Cease to be a Resident form explaining to SARS why you’re no longer a resident.
- A letter detailing your situation and reasons for leaving.
- The passport/travel diary that shows entry/exit stamps.
- Depending on why you left:
– Visa for your new country.
– Proof of foreign residency (if available).
– Details of property, business interests, and family still in South Africa.
– Information about social ties and belongings in South Africa.
– Details of any return visits to South Africa.
Remember that this declaration helps SARS adjust how they tax you going forward, and, depending on the year you left, there might be capital gains tax implications.
Read more: Emigration and changing your tax resident status after leaving South Africa.
Non-resident tax in South Africa – a quick note on recent changes
As of April 24, 2023, the old TCS PINs for emigration and foreign investment have been replaced by a new Approval of International Transfers (AIT) PIN, which must be sought through SARS. If you previously had those old PINs, it doesn’t automatically mean you’re a non-resident. You’ll still need to get the new non-resident tax status letter, as it is part of the paperwork requirement for international transfers out of South Africa.
Read more:
- SARS Alert – financial emigration doesn’t automatically make you a tax non-resident.
- Expats, avoid nasty surprises from SARS; verify your non-resident tax status today!
FinGlobal: tax emigration specialists for South African expats
If you’re unsure about your current tax residency status, FinGlobal can assist. We’re here to make your tax emigration from South Africa as stress-free as possible. We’ll deal with SARS and handle all the paperwork on your behalf, so you don’t have to have the headache of dealing with the revenue authority yourself from outside of the country.
FinGlobal can even assist with getting your SARS Non-Resident Confirmation Letter, SARS Approval of International Transfer applications, retirement annuity withdrawals, tax refunds and more. To learn more about our convenient cross-border financial and tax services for expats, leave your contact details in the form below, and we’ll get in touch soon!