If you are planning to leave South Africa permanently or you have already relocated abroad, you will need to apply for a non-resident tax status confirmation letter from the South African Revenue Service (SARS) once you are out of the country. This letter is important because it confirms you have exited the South African tax system, and notes that you are no longer liable to pay South African tax on your worldwide income, except for income that has a South African source.

So, what else does this non-resident tax status confirmation letter do for you? How do you use it? How do you apply for one? Let’s take a look.

What is the SARS non-resident tax status confirmation letter?

This is an official verification document issued by SARS to confirm that their records have been updated to reflect that an individual is no longer a tax resident of South Africa.

To be eligible for a non-resident tax status confirmation letter, you must meet the following criteria:

• You must have been a tax resident of South Africa.
• You must have left South Africa permanently (and been away for at least one year)
• You must not have any significant ties to South Africa, such as a home, a job, or a business.

In other words, you must no longer meet the requirements for tax residency in South Africa in order to become a non-resident.

To get a non-resident tax status confirmation letter, you must first complete the cease to be a tax resident process through SARS. This involves providing SARS with information about your assets, liabilities, and income.

You will then apply for a non-resident tax status confirmation letter by submitting a written application to SARS, in which you provide SARS with the following information:

• Your name and contact details
• Your South African ID number
• The date on which you ceased to be a tax resident of South Africa
• Evidence of your new tax residency, such as a visa or a certificate of tax residence from your new country of residence

It is important to note that the cease to be a tax resident process is not automatic. You must actively apply for a non-resident tax status confirmation letter from SARS. If you do not, you may still be liable to pay South African tax on your worldwide income.

Why is the non-resident tax status confirmation letter important?

This document is particularly important for South African expats. SARS issues a non-resident tax status confirmation letter to individuals who have ceased to be tax residents of South Africa. This letter confirms that the individual is no longer liable to pay South African tax on their worldwide income, except for income that has a South African source. The non-resident tax status confirmation letter can be used to cash in your retirement fund before the age of 55.

How long does it take to get a non-resident tax status confirmation letter?

The processing time is usually 2-3 weeks. However, it may take longer if SARS needs additional information from you. Once you have received your non-resident tax status confirmation letter, you should keep it safe. You may need to provide this letter to banks, financial institutions, or other organisations when you are dealing with your finances in South Africa.

FinGlobal: tax emigration specialists for South African expats

Get your tax affairs sorted today. We’ll help you every step of the way through the process of ceasing to be a South African tax resident and take the headache out of dealing with SARS from abroad. Once you’ve received your non-resident tax status confirmation letter, we can then help you to cash in your retirement annuity before the age of 55 and transfer the proceeds abroad.

Interested in hearing more about our convenient tax and retirement annuity encashment services for South Africans living abroad? Leave us your contact details and we’ll be in touch.