Over the past seven years, more than 50,000 South Africans have taken formal steps to cease tax residency in South Africa, according to the latest data from the South African Revenue Service (SARS). These numbers shed light on a growing trend of citizens and permanent residents choosing tax emigration from South Africa, a move that allows individuals to legally break ties with SARS and, in many cases, gain greater control over their finances.
Top three takeaways for expats on tax emigration from South Africa
- Ceasing tax residency gives you clarity and control. Making the formal change with SARS ensures you know exactly where and how you are taxed. Without it, you could still be liable for global income and miss opportunities to structure your finances efficiently. Tax emigration from South Africa simplifies your obligations and protects you from unexpected liabilities.
- Formal compliance avoids headaches later. Many expats assume leaving the country automatically ends their tax obligations. In reality, formalising your tax emigration with SARS is the only way to secure your SARS non tax resident status and prevent penalties or audits in the future.
- Non-resident status unlocks financial flexibility. Once SARS recognises you as a non-resident, you can open a non-resident bank account in South Africa, move funds abroad, and invest internationally without unnecessary restrictions. It’s a simple step that provides real control over your money while keeping you compliant. You also become eligible to cash in your South African retirement annuity in full, before the age of 55.
Read more: The dangers of not completing tax emigration after you leave South Africa.
Understanding tax residency in South Africa
Before diving into the benefits of tax emigration in South Africa, it’s important to understand what it means to be a tax resident in South Africa. Tax residency is separate from citizenship or permanent residence; it determines whether SARS taxes you on your global income. Individuals who meet SARS tax residency tests or spend significant time in the country are typically considered tax residents.
To formally change your status, you must submit a Declaration to Cease to be a Tax Resident via your ITR12 tax return as well as, in many cases, complete the RAV01 form SARS. From 2021 onwards, SARS requires taxpayers to indicate the exact date they ceased to be tax residents, making the process more transparent.
Why South Africans choose tax emigration
SARS data shows that over 51,500 taxpayers ended their South African tax residency between 2017 and 2024. While South Africa does not officially track emigration, this aligns with UN migration estimates, which indicate roughly 108,000 South Africans left the country between 2020 and 2024.
The reasons expats choose to cease tax residency with South Africa are varied:
- Reducing tax liability: High earners and those with significant foreign income can prevent double taxation and reduce exposure to South African tax on global income.
- Simplifying financial planning: Moving overseas often brings complex rules around pensions, retirement funds, and property. Tax emigration clarifies obligations, avoids unexpected tax bills, and gives expats eligibility to cash in their South African retirement annuity in full before age 55.
- Protecting savings from currency risk: By formally ceasing tax residency, expats can safeguard their retirement savings from the volatility of the South African rand (ZAR) and plan their finances in a more stable currency environment.
Read more: Considering tax emigration? Weigh up the advantages and disadvantages before deciding.
Steps to become a non-tax resident of South Africa
For South Africans planning to emigrate or formalise their move, ceasing tax residency in South Africa involves several key steps:
- Fail to meet residency requirements – To qualify as a non-resident, you must no longer meet the ordinarily resident test (no intention to return permanently) or the physical presence test (spend less than 91 days in SA this year and each of the previous five years).
- Inform SARS and update your details – Submit the RAV01 form via eFiling and indicate the date you ceased tax residency. Include supporting documents like a Declaration of Cease to be a Tax Resident, passport copy, proof of new address, and a motivation letter.
- Pay exit tax if applicable – One-time Capital Gains Tax may apply on your worldwide assets.
- Declare non-resident status on your ITR12 – Record your date of cessation to formalise your change with SARS.
- Obtain a SARS TCS PIN – Validates your tax compliance status for international transfers or accessing retirement funds.
- Manage South African-sourced income – Even as a non-resident, you must declare and pay tax on local income such as rental income, dividends, or pensions.
- Get your Non-Resident Confirmation Letter – This is your official proof of non-resident status for SARS and financial institutions.
Read more: Why tax emigration makes sense even without financial ties to South Africa.
Financial emigration vs tax emigration
Many confuse financial emigration from South Africa with tax emigration. While both involve changing your financial relationship with South Africa, financial emigration was a formal process under the South African Reserve Bank that changed your exchange control status from resident to non-resident. This process has been phased out, in favour of tax emigration through SARS. Tax emigration focuses solely on SARS compliance and ceasing tax residency.
Read more: Dangerous misconceptions about financial and tax emigration from South Africa.
FinGlobal: we can help plan your money moves
Whether you’re leaving South Africa permanently, managing assets abroad, or planning a future return, clarifying your tax residency status with SARS is essential. Ignoring it can lead to penalties, unresolved tax obligations, and restricted access to offshore funds.
With FinGlobal’s team of cross-border financial and tax experts, South Africans can take the right steps to formalise their non-resident status and enjoy the benefits of tax emigration: reduced exposure to South African tax, access to retirement annuity withdrawal benefits, streamlined international transfers and peace of mind knowing their finances are compliant.
To get started with FinGlobal’s trusted financial solutions for South African expats, leave your contact details in the form below and we’ll be in touch to discuss your requirements.