Moving abroad is exciting. New opportunities, new experiences, and the thrill of living in a different country are all part of the adventure. But for South African expats, it’s important to remember that physically leaving the country does not automatically end your obligations to SARS. Understanding South African tax residency is essential to avoid unexpected tax bills, protect your savings, and gain clarity about your global financial position.
Even if you live overseas for years, SARS may still consider you a tax resident depending on your circumstances. Many expats assume that simply leaving South Africa is enough to stop paying tax here — but that’s a dangerous misconception. South African expat tax obligations are determined by law, not geography.
SARS tax residency: the two key tests used in South Africa
According to SARS, tax residency in South Africa is determined using two main tests: the ordinarily resident test and the physical presence test. These are not competing tests, but rather layered assessments.
SARS will always apply the ordinarily resident test first. If you are not considered ordinarily resident under this test, SARS then applies the physical presence test. In other words, you can fail the first test and still be considered a tax resident by way of the second test.
Read more: South African tax residency rules – expats, are you still tax residents of South Africa?
What is the ordinarily resident test in South Africa?
The ordinarily resident test is the cornerstone of the SARS tax residency rules for expats. If SARS considers you ordinarily resident, you are a South African tax resident, liable for tax on your worldwide income, regardless of where it is earned.
Unlike the physical presence test, this one is subjective. It focuses on whether South Africa is your “real home” — the place you would naturally return to after traveling or working abroad.
Key factors SARS considers include:
- Your most fixed and settled place of residence
- Your habitual abode (where you stay most often)
- Location of your personal belongings
- Nationality
- Place of business and personal interests
- Family and social relations (schools, church, clubs, community)
- Political, cultural, or other activities
- Applications for permanent residence elsewhere
- Duration, purpose, and nature of periods spent abroad
- Frequency and reasons for visits back to South Africa
SARS can infer intention from these factors. For example, even if you’ve lived abroad for years, if your family, business, and long-term plans are still tied to South Africa — or if you intend to return at some point in the future — SARS may continue to view you as a tax resident.
What is the physical presence test in South Africa?
If you fail the ordinarily resident test, SARS applies the physical presence test. This test is purely objective and looks at the number of days you are physically present in South Africa over a rolling five-year period.
If you exceed specific thresholds (such as 91 days in the current year and 915 days in aggregate over five years), you may still be treated as a South African tax resident. However, even if you don’t meet the day-count thresholds, you could still be considered ordinarily resident if your ties suggest South Africa remains your real home.
Read more: Breaking tax residency with SA: when to apply the physical presence or ordinary residence test.
Let’s talk about double taxation agreements (DTAs) and tax residency
Another layer to consider is Double Taxation Agreements. Even if you meet the requirements of the ordinarily resident test or physical presence test, a DTA between South Africa and another country may override SARS’ determination. If the treaty deems you exclusively resident in your new country, this takes priority.
DTAs and tax emigration: what’s best for expats?
If a double taxation agreement (DTA) applies between South Africa and your new country, you might find yourself wondering whether it’s better to maintain your South African tax residency or formally cease it through tax emigration. The answer depends on your personal circumstances and financial goals.
How DTAs work:
A DTA sets out which country has the right to tax certain types of income. If the agreement assigns you exclusive tax residency abroad, SARS generally won’t tax your foreign income. This can reduce or even eliminate your South African tax liability on earnings from abroad, even if you remain a tax resident.
Read more: What is the difference between non-resident tax and foreign income tax in South Africa?
Maintaining tax residency:
Keeping your South African tax residency under a DTA may be beneficial if:
- The DTA already exempts your foreign income from SA tax.
- You want to retain access to certain benefits linked to tax residency, such as specific retirement annuity provisions.
- You prefer to avoid the administrative process of formal tax emigration, which involves asset disclosure and obtaining a tax clearance certificate.
Ceasing tax residency via tax emigration:
Formalising your emigration through SARS may be preferable if:
- You want absolute certainty that SARS will no longer treat you as a tax resident, reducing the risk of future disputes.
- You plan to access South African retirement annuities abroad, which requires tax emigration.
- You seek clarity for compliance purposes, particularly if the DTA could be interpreted differently in the future.
Read more: The dangers of not completing tax emigration after you leave South Africa.
Practical things to keep in mind when making your decision about tax residency:
- DTA protections may not cover all types of South African-source income, such as certain capital gains or local rental income.
- Some retirement savings withdrawals are only permitted once tax residency has ceased and three years have passed.
- Formal tax emigration provides a clear record with SARS, reducing audit risk and giving peace of mind.
Long story short? If a DTA clearly assigns exclusive residency to another country and you don’t need to access SA retirement funds, maintaining tax residency might be simpler. But if you want full clarity, access to retirement annuities abroad, and certainty in compliance, formally ceasing tax residency through tax emigration is generally the safer option.
Ceasing tax residency: the SARS tax emigration process
For expats who want that certainty, the only way to formally end tax residency in South Africa is through the SARS tax emigration process. This confirms you are no longer a South African tax resident.
How to cease tax residency and become a tax non-resident
- Submit a RAV01 form via SARS eFiling: Indicate the date you ceased being a tax resident and provide relevant details.
- Provide supporting documentation: This may include a signed declaration, passport or travel records, proof of residence abroad, and other documents SARS requests.
- SARS assessment: SARS reviews your submission, updates your tax residency status and issues a Confirmation of Non-Resident Status Letter, once approved.
This is different from financial emigration, which dealt with Reserve Bank exchange controls. Tax emigration focuses on SARS compliance and your tax residency status.
Read more: Dangerous misconceptions about financial and tax emigration from South Africa
What are the benefits of tax emigration for South African expats?
Formally ceasing residency comes with important benefits:
- Protect your global income as a South Africa expat: Once you are non-resident, foreign income is generally not taxed in South Africa.
- Access your South African retirement annuities abroad: The SARS tax emigration process allows you to withdraw retirement savings once conditions are met.
- Tax clarity for South African expats: Avoid uncertainty and double taxation by securing recognition of your non-resident status.
FAQs about South African tax residency and expat tax rules
Does leaving South Africa automatically end tax residency?
No. Unless you complete the SARS tax emigration process, you may still be a tax resident under the ordinarily resident or physical presence tests.
What’s the difference between tax emigration and financial emigration in South Africa?
Tax emigration is the SARS process to confirm non-resident status. Financial emigration involved Reserve Bank approvals and has largely been replaced.
Do I still pay tax on my income in South Africa if I’m working abroad?
Yes — if you’re still a tax resident. That’s why formally ceasing residency matters.
Can DTAs override SARS residency tests?
Yes. If a DTA assigns exclusive residency to another country, SARS must respect it.
FinGlobal: cross-border tax specialists for expats
Living abroad doesn’t mean you’ve left SARS behind. Your tax residency status depends on more than just where you live — and getting it wrong can be costly. FinGlobal can help you, clarify your tax residency status and walk you through tax emigration if that’s the path you choose. Our team is ready to ensure you stay on top of expat tax compliance and assist with your retirement annuity withdrawal, from start to finish.
If you’re ready to take the next step on your financial transition, leave your contact details below and a FinGlobal expert will connect with you to get you started.