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AIT: the ultimate guide to the new SARS Tax Compliance Status for South African expats

AIT: the ultimate guide to the new SARS Tax Compliance Status for South African expats

March 28, 2024

AIT A comprehensive guide for South African Expats

Are you a South African expat planning to move funds abroad? Buckle up, because the game has changed! Introducing AIT, the new Approval for International Transfers tax compliance process implemented by the South African Revenue Service (SARS), which throws a fresh hurdle into your financial migration journey. To ensure your funds get to their destination, we’ve put together a practical roadmap to direct you on your journey.

What is AIT? What does AIT stand for?

The SARS AIT (Approval for International Transfers) process is a protocol introduced to the Tax Compliance Status (TCS) system by the South African Revenue Service (SARS) to oversee and control the transfer of funds exceeding R1 million out of South Africa.

In the past, individuals wishing to financially migrate or transfer hefty sums of money out of the country had to obtain either the “Emigration” TCS PIN or the “Foreign Investment Allowance” (“FIA”) TCS PIN from SARS. The revamped SARS AIT process combines these two procedures and has become the main conduit for obtaining approval to transfer funds out of South Africa.

How has SARS tax compliance changed?

The new AIT process brings several key changes to the Tax Compliance Status (TCS) system:

  • One PIN for everything: No more juggling separate PINs! AIT unifies everything under one roof.
  • Tender option gone: The “Tender” option is no more. For third-party verification of your tax compliance, the “Good Standing” pin is now the only choice.
  • More documents needed: Be prepared to gather more supporting documents for your AIT application.
  • Asset & liability disclosure: Time to be transparent! You’ll need to disclose both local and foreign assets and liabilities at their cost value.

By understanding these changes, you can find your way through the SARS AIT process smoothly and ensure a stress-free transfer of your funds.

Why the new AIT process from SARS?

In April 2023, SARS launched the improved TCS system to make tax compliance easier for everyone. This enhanced system strengthens checks across government, businesses, and individual taxpayers. It might seem stricter, but its goal is actually to speed up approvals for those who follow the rules, while holding accountable those who don’t.

One key change is that the SARS AIT application requires a lot more information. This helps SARS ensure you’ve paid all your taxes and identify any potential issues early on. Think of it as a thorough check-up before you move your money. This aligns with the revenue authority’s goal of encouraging voluntary compliance and making the process smoother for everyone involved.

The new AIT process and the changes SARS has implemented to the TCS system point to the tax authority’s strategic intent, which is to follow the money to ensure compliance. SARS now wants to look at –

  1. The source of your funds
  2. Your statement of assets and liabilities (at cost and market value)
  3. The destination of your funds

Who is required to apply for an AIT from SARS?

The AIT procedure is relevant for South African tax residents who want to transfer amounts exceeding R1 million out of the country within a calendar year. Additionally, AIT applies to taxpayers who have terminated their tax residency in South Africa, and now intend to transfer funds internationally from a source within South Africa.

Read more: International money transfers: What do you need from SARS to move funds from SA if you are no longer a tax resident?

How much money can a tax resident transfer without AIT compliance clearance?

If you are a tax resident, you will not require an AIT PIN when the amount you wish to transfer is within your Single Discretionary Allowance of R1 million.

Read more: Transferring money out of South Africa – the Single Discretionary Allowance vs the Foreign Capital Allowance.

Requesting a TCS PIN from SARS for International Transfers

The South African Revenue Service (SARS) requires a Tax Compliance Status (TCS) PIN for international transfers exceeding certain amounts. Here’s how you can obtain your PIN:

1. Self-service options:

  • eFiling: Access the eFiling platform and initiate a Tax Compliance Status Request. Select the “Approval International Transfer” option and complete the necessary details. Submitting electronically typically yields faster processing.
    SARS Online Query System: You can also utilise the online query system to request your TCS PIN. This method verifies your compliance status with these platforms.

2. Professional assistance:

  • Tax and Accounting Provider: Consider seeking assistance from a qualified tax or accounting professional, such as FinGlobal. We can request the AIT TCS PIN on your behalf, provided you grant us the necessary power of attorney. This option can be helpful if you’re unfamiliar with the process or would prefer that the experts handle it on your behalf.

3. If you are already living abroad:

  • Cease to be a Resident Process: If you’re already a non-resident before requesting a TCS PIN, ensure you’ve completed the formal “cease to be a resident” process with SARS, as you will be required to verify your tax resident status as part of the AIT paperwork requirement.

Furthermore, the confirmation requirements for your AIT PIN application include:

  • Disclosing if you are a beneficiary of any Trust(s).
  • Indicating whether you possess a direct/indirect shareholding of 20% or greater in any Legal Entity (Local or Foreign).
  • Reporting if you currently have loan(s) extended to a Trust (Local or Foreign).

Points to remember

  • The specific procedure and required documents may vary depending on your individual circumstances and the type of international transfer.
  • It’s essential to adhere to all SARS regulations and complete the process accurately to avoid delays or complications.

Read more: What supporting documents does SARS require with the Approval of International Transfers (AIT) application?

FinGlobal: tax clearance specialists for South Africans

Transferring funds out of South Africa doesn’t have to be stressful. Take the worry out of tax compliance, and let us handle your Approved International Transfer application with SARS. We will assist you every step of the way, from application through to successfully remitting your funds offshore. We can also assist you with getting your Non-Resident Confirmation Letter from SARS, if you ceased your tax residency before 2023.

To put our convenient, hassle-free services to the test, simply leave your contact details in the form below and one of our dedicated specialists will be in touch!

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