Authored by: Jonty Leon, Tax Attorney at Tax Consulting SA
Financial Emigration Ceases Tax and Exchange Control Residency
The process of “Financial Emigration” terminates your tax residency status with the South African Revenue Service (“SARS”) as well as your status as exchange control resident with the South African Reserve Bank (“SARB”).
The SARS process includes a verification or “audit” procedure, as financial emigration is not something that is casually agreed to by SARS, because they are prohibited from taxing the non-resident on worldwide income.
The upshot is also that when you complete your South African or offshore bank’s CRS and/or FACTA forms, you can formally note yourself as non-resident for South African tax purposes.
The SARS process is duly evidenced by an “Emigration Tax Clearance Certificate”, which is part of South African Administrative Law and comes with a guarantee as per section 33 of our Constitution.
Does the Emigration Tax Clearance Certificate Guarantee Legal Defence?
This is a double-edged sword
It is imperative to apply for tax non-residency in a correctly completed financial emigration process.
When the financial emigration process is not correctly administered, there is no protection and tax residency is not correctly terminated. There is no prescription under administrative law if due process was not followed.
We are increasingly encountering SARS auditors who look at the substance of applications and the only path of prudence is to have an “audit file” prepared in case of future SARS investigation.
There is no time to get your ducks in a row once an audit commences, so prepare in advance.
Is Financial Emigration the Only Option?
Of course not, there are many options. Our views on the options and way forward for the expatriate community have been recently noted by Jerry Botha of Tax Consulting SA.
So Many Expatriate Tax Experts, Suddenly
There is a definite amusement factor to the flurry of experts now commenting hereon, in the areas of international tax. None of them were present in Parliament in 2017 arguing against the tax law change, or attended the National Treasury and SARS consultative sessions; yet now are very vocal as the implementation of the amended law approaches.
Noting this, how do you choose a provider to assist with financial emigration or with expert guidance?
MEDIA CONTACT: Rosa-Mari Le Roux, 060 995 6277, firstname.lastname@example.org,www.atthatpoint.co.za
ABOUT Tax Consulting SA:
Tax Consulting SA offers a streamlined service in the calculation and filing of individual income tax returns, provisional income tax returns or any other more complex individual tax relate matters. Our highly qualified team of Tax practitioners are registered with SARS under controlling body of the South African Institute of Tax Practitioners (SAIT). As tax specialists, we remove the burden from clients to keep their tax affairs in good order, achieving optimal tax savings while ensuring full compliance.
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