The SARS tax compliance status (TCS) processes involved with making international money transfers out of South Africa have changed. Where previously you would use the TCS – Emigration to repatriate money from South Africa post-emigration, or the TCS – Foreign Investment Allowance to use your annual exchange control allowance, these two TCS processes have been merged into a single application, now known as the Approval of International Transfers (AIT) application.
Let’s take a look at what you need to know about using this new SARS process to get your money overseas and what the paperwork requirements are, from a tax resident and non-resident perspective.
Supporting documents for Approval of International Transfers (AIT):
When applying for tax clearance to make an international transfer from South Africa, SARS will need the following supporting paperwork from you:
- Documentation that shows the origin of the funds you intend to move offshore. For details relating to each capital source, see below.
- Statement of assets and liabilities covering the past three tax years. This should be a comprehensive disclosure of all investments, loan accounts, and payments from both local and foreign entities, including companies and trusts.
- Relevant documentation indicating power of attorney has been granted. For cases where the TCS application is submitted by an individual other than the taxpayer.
Supporting documents for Approval of International Transfers (AIT) for non-residents:
Your Non-Resident Confirmation Letter from SARS. This is required to verify your tax residency status within South Africa, and reflects the date on which you became a non-resident.
Supporting documents that show the source(s) of the total value of the Approval of International Transfers:
1. Savings or cash:
- Bank statements no older than 14 days before the date of the AIT application, reflecting the cash/savings value.
- Supporting documents verifying the origin of the cash/savings.
2. Distributions from a trust:
- Copy of Trust deed/instrument.
- Copy of the latest Letters of Authority (LoA) from the Master of the High Court.
- Resolutions by trustees of the local trust making the distributionsDetails of the source of funds to be distributed by the trust bank statements of the applicant (dated within 14 days of the AIT application).
- Recent share portfolio statement of the trust (not older than one month).
- Declaration of donation (IT144).
- Donor’s bank statement reflecting the donation (dated within 14 days of the AIT application.
- Donee’s bank statement issued no longer than 14 days before the date of the AIT application, reflecting the donation received.
- Proof of donations tax paid (except spousal or exempted donations).
- Copy of Final Liquidation and Distribution account stamped and signed by Master of High Court.
- Bank statement issued within 14 days before the AIT application, reflecting the inheritance received
5. Loans between individuals:
- Signed loan agreement.
- Lender’s bank statement with the loan amount, issued no longer than 14 days before the date that the AIT application is submitted
- Details of lender’s capital source.
- Borrower’s bank statements issued within 14 days of the AIT application reflecting the loan amount.
6. Loan between trust and trustee or beneficiary:
- Completed, signed loan agreement.
- Copy of the trust resolution signed by trustees.
- Trustee/beneficiary bank statement issued within 14 days of the AIT application, reflecting the loan amount.
- Most recent trust Financial Statements/annual Financial Statements.
- Recent share portfolio statement of the trust (within a month).
7. Loan between company and director/employee:
- Signed loan agreement.
- Borrower’s bank statement issued within 14 days of the AIT application, reflecting the loan amount.
- Company’s latest annual financial statements.
8. Sale of property:
- Conveyancer’s letter confirming transfer of the property and that funds will be transferred from the conveyancer’s trust account.
- Proof of the receipt of proceeds in the applicant’s bank statement issued no longer than 14 days before the date that the AIT application is submitted.
- Allocation of proceeds for jointly owned property.
- Capital Gains Tax calculation.
Note: Non-resident property sellers must follow the requirements of Section 35A of the Income Tax Act.
9. Sale of shares and securities:
- Capital Gains Tax calculation for disposed shares/securities.
- Portfolio statement (not older than a month) if shares not disposed.
- Proof of transaction(s) for disposed shares by the AIT application.
10. Sale of crypto assets:
- Trading account statement for crypto asset trade.
- Bank statement issued within 14 days of the AIT application, reflecting the transferable amount.
11. Transfer of listed securities:
- Details of locally listed securities that will be transferred to an exchange offshore.
- Copies of supporting documents relating to the transfer
12. Investment income – local and foreign:
- Schedules of received interest/dividends reflecting the source and amount.
13. Royalty income:
- Source and amount of royalty income.
- Proof of royalty payment.
- Details and documentary proof of earnings.
- Policy number indicating that the institutional insurer will apply on the taxpayer’s behalf.
15. Income from entities (local or foreign) in which the taxpayer holds an interest:
- Nature of relationship with the entity.
- Proof of amounts/distributions received from said entities.
- For business owners: company group structure, profile, and other group investments.
- If a director is a shareholder/member of an entity, a shareholder’s agreement and share incentive scheme agreement.
16. Other: Any relevant paperwork and an explanation.
Source: SARS website.
FinGlobal: cross-border financial specialists for South Africans
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To take advantage of our convenient, compliant online services, please leave your details below and we’ll be in touch to find out more about your specific requirements. Alternatively, you can send us an email to firstname.lastname@example.org with all your financial and tax emigration questions.