Many South Africans who move abroad for better opportunities eventually long for home. South Africa is in our DNA, and it’s hard to resist the call of our homeland. Whether due to changing circumstances, homesickness, or simply a desire to return to their roots, the question often arises: “Can I return to South Africa after emigrating?” The good news is yes! South Africa always welcomes its citizens back with open arms. However, the process of returning may involve some paperwork and formalities. Let’s explore what expats moving back to South Africa need to know about the tax and civic implications of coming home.

Tax and other things to think about moving back to South Africa

When you left, emigrated from South Africa, and completed formal emigration through the South African Reserve Bank, your tax residency status was changed to non-resident for exchange control purposes. This will need to be reversed.

From a tax perspective, it’s essential to know that moving back to South Africa permanently will entail a resumption in tax resident status. This means the South African Revenue Service (SARS) will again tax your worldwide assets and income. Here, it is essential to determine when you’re likely to resume your tax residency in the context of South Africa’s two tax residency tests – the ‘ordinarily resident’ and ‘physical presence’ tests. After your return to South Africa, certain assets like stocks, mutual funds, and cryptocurrency might be revalued for tax purposes. This means that the original purchase price of these assets will be adjusted, which could affect your future tax liability. Working with a tax advisor can help you plan your return to minimise your tax burden by understanding the tax implications of bringing money into South Africa.

You should also rethink your estate planning before moving back to South Africa. By setting up trusts or similar structures, you can reduce donations taxes and estate duty to ensure a smoother transfer of your assets to your loved ones.

Before you make the big move back to South Africa, it’s essential to understand your financial and tax situation as an expat. Why it matters:

• Avoiding tax troubles: Improper planning can lead to unexpected tax liabilities on your worldwide income and assets.
• Ensuring a smooth transition: A clear financial plan will make your return more manageable.

Read more: Expats! Are you still a tax resident in South Africa? Here’s how to find out.

Expats returning to South Africa – reversing financial emigration

If you formally emigrated before March 1, 2021, you must reverse this decision with the South African Reserve Bank. To do this, consider consulting an emigration specialist who can:

• Assess your eligibility to change your exchange control status
• Review your tax history and identify any compliance issues
• Assist with completing the necessary SARS forms

Returning to South Africa after tax emigration

To reverse your tax emigration, you must inform SARS that you’ve returned to South Africa to become a tax resident again. You will need to show your eligibility to resume tax residency, which includes:

• Your permanent return: You must have returned to South Africa intending to stay permanently
• Supporting evidence: You must provide proof of your residency, such as a South African address, employment contract, or property ownership.

Resuming tax residency when returning to South Africa starts with informing SARS. You’ll submit the RAV01 form on eFiling to declare your return. You’ll then need to submit your declaration letter and supporting documents, such as your passport or travel diary, proof of South African address and evidence of economic ties to South Africa. Once you have restored your tax resident status, you’ll be subject to South African tax on your worldwide income.

Civic considerations for expats when returning to South Africa

If you’re planning to move back to South Africa, you might need to resume citizenship:

• Former citizens: If you were born a South African citizen but gained another citizenship, you might need to reapply for South African citizenship formally.
• Naturalised citizens: If you become a South African citizen through naturalisation, you must reapply for permanent residency or seek an exemption.

Business and tax considerations for expats returning to SA

If you plan to work in South Africa after returning, consider setting up a South African company. This can be a cost-effective way to structure your business, but it’s essential to be aware of potential tax implications and anti-avoidance rules. If you’re returning to employment, you must ensure you’re registered with SARS for income tax purposes. Remember, you’ll be taxed on all income earned in South Africa and your global income.

FinGlobal: cross-border financial specialists for South Africans

If you’re an expat planning to return to South Africa, we can help simplify your transition. Our services include tax compliance, tax clearance, exchange control advisory, international money transfers, and setting up local bank accounts. To learn more about how we can assist you with your homecoming, please contact us for a free consultation.