SARS AIT: What to expect when transferring proceeds from South Africa

South Africa’s exchange control and tax systems are in the process of being modernised and overhauled. This means that the South African Reserve Bank (SARB) and the South African Revenue Service (SARS) are constantly tweaking and refining the procedures involved in transferring money out of South Africa to make it simpler for individuals and entities to comply with exchange control and tax regulations. With so much change afoot, we thought you would find it helpful if we put together a guide that walks you through the changes, and tells you what you need to know about making international money transfer from South Africa.

Understanding the new Approval for International Transfers (AIT) process from SARS

What’s changed when it comes to moving money out of South Africa?

In April 2023 the South African Revenue Service (SARS) revamped the process for individuals seeking to make an international money transfer from South Africa. Previously, applications were handled under separate categories like “Emigration” or “Foreign Investment Allowance.” Now, everything falls under a single umbrella: the SARS Approval for International Transfers (AIT) process.

Read more: Expat Talk: Important things to know about South African exchange control regulations when living abroad.

Who needs AIT approval from SARS?

• Tax residents: If you plan to transfer more than R1 million out of South Africa in a year, you’ll need SARS AIT approval.
• Tax non-residents: You will generally need SARS AIT approval for any amount you want to transfer abroad, with few exceptions.

What information is required when making an AIT application with SARS?

The new SARS AIT process involves more detailed disclosures compared to the past. You’ll need to provide:

• Tax residency status: Confirm your tax resident status with SARS.
• Financial information: Disclose the sources of the funds you’re transferring, along with details of your local and foreign assets and liabilities.

You will also be required to disclose the following on your application for the AIT PIN:

• Whether you are a trust beneficiary.
• Whether you have a direct/indirect shareholding in any local/foreign entity of 20% or more.
• Whether you hold an existing loan to a local/foreign trust.

The more stringent information requirements aim to enhance transparency and ensure compliance with South African tax regulations.

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

What is an Approved International Transfer TCS PIN?

In October 2023, SARS adjusted the AIT Tax Compliance Status (TCS) PIN process based on stakeholder feedback, in order to improve efficiency and accuracy. The major changes related to:

• Making foreign assets optional for long-term non-residents: Taxpayers who ceased being residents over 5 years ago no longer need to disclose foreign assets and liabilities in their AIT applications.
• Providing clarity on residency status: AIT approvals now show the applicant’s residency status at the time of approval, enhancing transparency.

The AIT TCS PIN is required by the Authorised Dealer in order to execute your international money transfer, by first checking that your tax affairs are in order before your money can be remitted abroad.

Read more: Important documents and requirements for transferring money before and after leaving South Africa.

How much money can you take out of South Africa?

For South African tax residents, there are two exchange control allowances that can be used on an annual basis for individuals to move money out of South Africa. These are:

1. The Single Discretionary Allowance: (the maximum money transfer without tax clearance) which can be used to move up to R1 million per calendar year, per individual.
2. The Foreign Investment/Capital Allowance: (requires tax clearance in the form of the AIT TCS PIN from SARS) which can be used to move up to R10 million per calendar year, per individual.

Read more: Avoiding common pitfalls when transferring funds abroad from South Africa.

How long does the AIT process with SARS take?

While the SARS website doesn’t explicitly state the processing time for AIT applications, they do provide a general timeframe for similar inquiries:

• For applications requiring no inspection: SARS aims to process and finalise them within 5 business days.
• For applications requiring inspection: SARS aims to process and finalise them within 21 business days.

However, it’s important to note that these are general guidelines, and the actual processing time for your AIT application may vary depending on factors like the complexity of your case and the completeness of your submitted documents. To avoid unnecessary delays, it is advisable to seek professional assistance when making international money transfers from South Africa.

FinGlobal: cross-border financial and tax specialists for South Africans

Staying on top of exchange control and tax compliance requirements can get complicated. To avoid any unexpected delays and ensure that your international money transfer from South Africa goes smoothly, our team is ready to handle your AIT application with SARS, from start to finish.

Let us handle your tax clearance, tax compliance, and get your money moved out of South Africa without hassle or stress.
To find out about our full suite of cross-border financial solutions for South Africans, please leave your contact details below and we’ll be in touch to answer any questions you might have.