“Therefore, if one financially emigrates (taking into consideration the tax residency tests) that would then indicate that the taxpayer ceased to be a tax resident.”
SARS, Foreign Employment Income Team, 18 October 2019
We specialise in the financial emigration process for international South Africans who are primarily completing the process for tax planning and compliance purposes. Following our submissions to the Parliament Standing Committee on Finance on 29 August 2017 by our Managing Partner, Jerry Botha, he confirmed that both National Treasury and SARS noted on record in Parliament that the fiscal formalities are critical and part of our law to confirm non-residency for tax purposes.
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 FATCA 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.
An incorrectly followed financial emigration process, albeit that you will still achieve the outcomes of cashing in your retirement annuity and foreign exchange allowance (which our associate providers specialize in), does not guarantee SARS acceptance from a tax non-residency perspective. SARS and National Treasury was clear hereon in the 29 August 2017 Standing Committee – the taxpayer must comply with formalities and where the correct compliance steps are not followed, the taxpayer remains in default.
Contrary to misinformation, the financial emigration process does not require the giving up of citizenship, handing in of passport, selling of property or cancelling of bonds and financial products. There is a closure of a South African resident bank account, but a non-resident bank account can immediately be opened and we expertly deal with the more complex questions.
We have over 75 full-time professionals including a highly specialised team of admitted tax attorneys, chartered accountants, CFP®’s, financial emigration specialists and tax practitioners who are geared for the more complex cases where you require technical depth and with a proven track record of guaranteeing non-resident tax status with SARS and SARB through Financial Emigration