South African Expat Tax

EXPAT TAX - a topic around many braais of people thinking of leaving South Africa - that and loadshedding.

There appears to be a lot of misinformation regarding expat tax from industry professionals which has lead to a lot of confusion – particularly amongst South Africans who are thinking of leaving South Africa but are now worried that they will be forced to continue paying SARS while living abroad.

Well, I am here to tell you that if you intend to move overseas permanently and have no real intention to move back to South Africa then you do not have to worry. Your days of paying the circus that is SARS are over!

The new expat tax applies only to people who remain considered as South African residents despite leaving. South Africa has a residence-based system of taxation, meaning that RESIDENTS are taxed on their worldwide income and gains. Non-residents remain taxable only on their South African source of income - which, if you have truly emigrated should be zero.

The SARS guideline says that you must meet ALL THREE of the following requirements to be considered a resident:

you must be physically present in SA for a period exceeding 91 days in total during the year of assessment under consideration;

you must be physically present in SA for a period exceeding 91 days in total during each of the five years of assessment preceding the year of assessment under consideration; and

you must be physically present in SA for a period exceeding 915 days in total during those five preceding years of assessment

So, in simple terms, expat tax should not worry you at all if you are thinking of leaving South Africa for good. Not as much as the lack of electricity anyway - David Dadic