For many South Africans who have left the country to live abroad, understanding their tax obligations back home can be tricky and confusing. While emigrating physically is one step, ceasing your tax residency with the South African Revenue Service (SARS) is another major process that must not be overlooked. In this article we will explore the SARS non-resident declaration form, how to get confirmation of your tax non-residency status, and why it matters — especially for those who emigrated before 1 March 2021 and those considering formal tax emigration now.
What does it mean to cease tax residency in South Africa?
Ceasing tax residency means officially informing SARS that you no longer meet the criteria to be considered a South African tax resident. This is different from financial emigration from South Africa, which used to be done through the South African Reserve Bank (SARB). Financial emigration was primarily about transferring your funds and deregistering from the exchange control system, but it did not automatically end your tax residency with SARS.
Many South Africans who financially emigrated before 1 March 2021 may still be tax residents, which means SARS expects them to submit returns, declare worldwide income and potentially pay tax in South Africa. The SARS Declaration: Cease to be a Tax Resident is the official process to stop this liability by confirming that you are no longer a tax resident.
South African tax residency rules – the basics you need to know:
SARS determines tax residency in South Africa using two main tests:
- Ordinarily resident test: Are you ordinarily resident in South Africa, meaning your usual home is here?
- Physical presence test: Did you spend 91 days in South Africa in the current tax year and a total of 915 days over the past five years?
If you meet either test, you are considered a tax resident and thus liable for tax on your worldwide income. However, as a tax resident, you can make use of the foreign income tax exemption. Non-residents are taxed only on South African sourced income.
Read more: Clarifying resident vs. non-resident tax status for South African expats.
What is the SARS non-resident declaration?
The SARS Declaration: Cease to be a Tax Resident is the official form through which SARS confirms that you have ceased to be a South African tax resident. This helps SARS update your tax resident status and ensures you’re no longer taxed on your global income. Obtaining this confirmation is vital because without it, SARS may continue to consider you a tax resident and expect tax returns and payments on your foreign income.
Who should complete the SARS Declaration: Cease to be a Tax Resident?
- Recent emigrants who want to formally cease tax residency with SARS and avoid South African tax on foreign income.
- South Africans who financially emigrated before 1 March 2021 but have not yet ceased tax residency with SARS.
It’s important to note that financial emigration does not mean you have ceased tax residency in South Africa. The SARS non-resident declaration is now the only acceptable method.
Read more: Emigration and changing your tax resident status after leaving South Africa.
How to get confirmation of tax non-residency from SARS
Tax emigration is the formal process of ending your tax residency in South Africa. Here’s how it works:
- Formal notification: You must inform SARS of your intention to permanently relocate and cut financial and tax ties with South Africa.
- Supporting documentation: You’ll need to provide proof of departure, your new overseas address, and any other relevant documents that demonstrate you no longer meet the requirements to be considered a South African tax resident.
- Exit tax (if applicable): When ceasing tax residency, you may be liable for an exit charge – this is Capital Gains Tax (CGT) on the deemed disposal of your worldwide assets on the day before you cease to be a tax resident. South African fixed property is excluded from this calculation.
Read more: Tax emigration – how to become a non tax resident of South Africa.
Already ceased tax residency? Here’s how to get confirmation from SARS
If you’ve already completed the tax emigration process before 2023 but never received formal confirmation from SARS, you’ll need to request this manually. To do this:
- Draft a letter addressed to SARS explaining your request for confirmation of non-resident tax status. Include details such as:
– The date you ceased tax residency.
– The basis on which you ceased to be a tax resident (e.g. ceased to be ordinarily resident or failed the physical presence test).
– How and when SARS was previously informed of this change (e.g. via tax return or eFiling submission). - Attach supporting documents if you have them – such as your original submission or notification, foreign residency certificate, or correspondence from SARS.
Once SARS processes your request and verifies your non-residency, they will issue a Non-Resident Confirmation Letter, formally recognising your status as a non-resident for tax purposes.
Benefits of obtaining the SARS Non-Resident Confirmation Letter
- Avoid double taxation on your worldwide earnings and simplify your South African tax return filings, since non-residents have fewer tax filing requirements.
- Get peace of mind that your non-resident tax affairs in South Africa are up to date and compliant.
- Complete your paperwork – this document is essential to prove your tax resident status as part of the paperwork requirements for the SARS Approval – International Transfer tax clearance process, which is essential for cross-border money transfers.
- Become eligible to cash in your South African retirement annuity before the age of 55. Your fund administrator will not be able to process your withdrawal request without this document.
Final tips for transitioning to non-resident tax status after emigration:
- Keep SARS informed of any changes to your residency status promptly.
- Ensure you file all outstanding tax returns before applying for non-resident status.
- If unsure about your status or the process, consult a tax professional experienced in South African expat tax matters.
Read more: Emigration and changing your tax resident status after leaving South Africa.
FinGlobal: cross-border tax specialists for expats
Don’t risk unnecessary tax liabilities as a South African expat. Let FinGlobal guide you through the process of tax emigration, securing your SARS Non-Resident Confirmation Letter, and withdrawing and transferring your retirement annuity abroad. We specialise in cross-border tax solutions for South Africans, offering a complete, hassle-free service to help you manage your financial transition with confidence.
For more information on our convenient, trusted tax services for expats, please leave your contact details below and we will be in touch soon.