SA Expats Warned to Fix SARS Tax Residency Records or Risk Worldwide Tax Bill

• Tax Consulting SA experts warned South African expats that confusing terminology around tax residency is putting them at serious compliance risk
• Experts explained that SARS replaced the Reserve Bank as the authority responsible for verifying and recording a taxpayer's tax residency status since March 2021
• South Africans living abroad who still own property, investments or bank accounts in SA face real consequences if their SARS records are not up to date

South African expatriates are being urged to stop getting caught up in conflicting jargon and focus on one thing that actually matters: making sure SARS has the correct record of their tax residency status. That is the warning from Tax Consulting SA's Legal Manager of Cross-Border Taxation, Delano Abdoll, alongside Expatriate Tax Support Specialists Asamkele Tyala and Carmen Sevenster.

What is causing the confusion

The three experts say a flood of self-styled advisers, AI-generated content and even some qualified attorneys have created an environment where South Africans living abroad are receiving contradictory guidance. Terms such as 'tax emigration', 'divorcing SARS', 'ceasing tax residency' and 'financial emigration' are all circulating, yet they describe the same legal process under the same section of the Income Tax Act.

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What expats actually need to do

Since March 2021, SARS replaced the South African Reserve Bank as the primary authority for verifying and recording tax residency status. A South African registered as a tax resident must update that status with SARS before their bank can process any related exchange control requirements.

There are two legal routes to ceasing South African tax residency: proving you are no longer ordinarily resident in South Africa, or demonstrating under a Double Taxation Agreement that you are exclusively tax resident in another country. Simply stating an intention to leave is not sufficient. According to Daily Investor, SARS will assess all relevant facts before reaching a conclusion.

Why it still matters from abroad

Those who assume SARS compliance is someone else's problem are taking a real risk. Under the Tax Administration Act, providing inaccurate information to SARS can constitute a criminal offence. Beyond that, an incorrect residency record means SARS could tax a person on their worldwide income rather than only on South African-sourced income.

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Many expats also retain strong ties to South Africa, whether through property, retirement annuities, inheritances or plans to return. For straightforward cases, professional assistance to regularise one's status is available for under R4,000. The goal, according to Abdoll, Tyala and Sevenster, is simple: obtain official confirmation from SARS recognising your non-resident tax status, and keep it safe.

3 Other Briefly News stories about SARS

• BASA warned that new alcohol excise proposals could raise beer prices by 20% for most South African brands.
• Tax experts warned South African employees that SARS treats personal use of a company vehicle as additional taxable income.
• South African content creator Tsontso shared a screenshot revealing she owes SARS over R700,000 in outstanding tax.

Source: Briefly News