Thinking about leaving South Africa — at least on paper? Whether you’re planning a permanent move abroad, chasing career opportunities overseas, or simply curious about your options, you’ve probably come across the term’s financial emigration and tax emigration. And if you’re like most people, you’ve probably also stumbled into a maze of conflicting information, confusing jargon, and outdated advice.
You’re not alone.
With changes to the financial emigration process in recent years, and SARS placing more focus on tax compliance, it’s no wonder so many expats are asking: “How do I become a non-tax resident of South Africa?” or “What happens if I break tax residency?”
In this article, we’re here to clear the air. We’ll explain the difference between financial and tax emigration, bust some of the most common myths floating around, and help you understand what it really means to cease tax residency in South Africa — without the doom, gloom, or complicated tax talk.
Financial emigration vs tax emigration: what’s the difference?
Financial emigration (also known as formal emigration) used to be the official process through the South African Reserve Bank (SARB) to change your residency status for exchange control purposes. As of March 2021, this process has been phased out and replaced by a more tax-focused approach.
Now, the key process is tax emigration or ceasing to be a tax resident of South Africa. This involves informing the South African Revenue Service (SARS) that you no longer meet the criteria for residency for tax purposes. This change is reported using the RAV01 form on SARS eFiling, along with supporting documentation and a motivation explaining why you should no longer be considered a tax resident.
Read more: Financial Emigration vs Tax Emigration in SA.
Common misconceptions about financial and tax emigration
1. Ending tax residency means giving up South citizenship
This is one of the biggest myths. Tax residency and citizenship are separate. You can cease to be a tax resident and still retain your South African citizenship, your passport, and even your right to vote. Becoming a non-tax resident of South Africa doesn’t strip you of your national identity.
Read more: Automatic loss of South African citizenship no longer possible.
2. Expats who become tax non-residents cannot return to South Africa
Another false belief. Ceasing tax residency doesn’t bar you from returning — either temporarily or permanently. Many South Africans who cease tax residency do return home for holidays or even to resettle. However, returning to South Africa after financial (or tax) emigration may trigger a change in tax status, depending on your circumstances.
Read more: Returning to South Africa? Tax implications for the non-compliant expat’s homecoming.
3. Owning assets in South Africa is prohibited for non-residents
Not true. You can still own property, shares, and other assets in South Africa even after breaking tax residency. However, these may be subject to different tax treatments. For example, rental income from a South African property will still be taxable in SA, even if you are a non-resident for tax purposes.
Read more: Ceasing South African tax residency – what happens to your assets afterward?
4. Tax emigration is only for the wealthy
The assumption that tax emigration from South Africa is only relevant to high-net-worth individuals is misleading. Anyone living abroad permanently or intending to do so can benefit from ceasing tax residency, particularly if you do not wish to be taxed on your worldwide income in South Africa (expat tax). Whether you’re a retiree, digital nomad, or expat contractor, the key is whether you still meet SARS’ tests for tax residency.
Read more: Considering tax emigration? Weigh up the advantages and disadvantages before deciding.
5. Ending tax residency in South Africa is complex, expensive, and results in a massive tax liability
While there can be tax implications — such as capital gains tax on emigration from South Africa (also called an “exit tax”) — it’s not always excessive. If you plan carefully and get the right advice, the tax implications of emigrating from South Africa can be managed efficiently.
The complexity lies in gathering the right documents, determining your residency for tax purposes, and submitting your SARS declaration to cease to be a tax resident. This often includes a TCS (Tax Compliance Status) application, specifically for Approval for International Transfer (AIT) if you wish to move funds abroad.
Read more: Tax emigration – how to become a non tax resident of South Africa.
6. Ceasing tax residency eliminates the need to file tax returns
Even if you are a non-tax resident of South Africa, you may still need to file returns — especially if you earn income from South African sources. This includes rental income, annuities, or investment returns. SARS may still require a tax compliance status verification, especially when remitting funds abroad.
Read more: Do I still need to submit my South African tax returns if I’ve emigrated?
7. Tax emigration happens automatically when you emigrate
Incorrect. Ceasing tax residency is not automatic. It requires a formal declaration to cease to be a tax resident through SARS eFiling, using the RAV01 form. You must also provide supporting documents such as tax residency certificates from your new country, proof of long-term relocation, and more.
In addition, applying for an Approval for International Transfer (AIT) and a TCS PIN is often required when moving funds offshore. Many expats are unaware that a SARS AIT application may trigger a review of their overall compliance and tax affairs, which could be problematic for some who have allowed their compliance to lapse due to their absence.
8. South African bank accounts remain unaffected by tax emigration
Not true. Once you are no longer a resident, your bank may require you to convert your existing account into a non-resident bank account in South Africa. These accounts have specific rules and may be subject to additional reporting and compliance requirements.
If you’re opening a non-resident bank account in South Africa, you’ll need to show that you are no longer a resident for tax purposes. Banks may ask for proof of your tax compliance status, declaration of non-residency, and SARS-issued documentation confirming your change in status.
Read more: Keeping your South African bank accounts and financial connections post-emigration.
9. Financial/tax emigration completely removes all tax obligations
This is perhaps the most dangerous misconception. Ceasing tax residency does not erase tax obligations altogether. It simply means SARS can no longer tax you on your worldwide income. If you still earn income from South African sources, you are still liable for non-resident tax in South Africa, also known as expat tax. This includes income tax on rental income, pensions, annuities, and certain investment returns. Many expats are still affected by South African expat tax, especially if SARS later determines that you never formally ended your tax residency, because you completed financial emigration through SARB before 2021.
Read more: Your SARS Tax Compliance Status – what expats need to know.
What you should know about ceasing tax residency in South Africa
Becoming a non-tax resident of South Africa is a strategic decision — not a loophole or shortcut. It requires understanding SARS’s rules around how to cease tax residency in South Africa, the documentation required, and how to stay compliant through the Tax Compliance Status (TCS) system.
Read more: Should you undergo tax emigration if you live abroad but still have assets in South Africa?
FinGlobal: tax emigration specialists for South African expats
Emigrating from South Africa doesn’t have to mean endless admin and uncertainty. With FinGlobal by your side, you can confidently take care of everything — from tax emigration and retirement annuity withdrawal to opening a non-resident bank account in South Africa. We’ll help you stay compliant, informed, and in control every step of the way. Reach out to FinGlobal today and let us take the hassle out of moving your finances abroad.