
Tax refunds
Expats living abroad might qualify for tax refunds back home. Here’s how to claim tax back from South Africa.
FinGlobal makes it easy to get your South African tax refund.
As a South African living overseas, you may want to know if you qualify for a tax refund from the South African Revenue Service (SARS), which allows you to claim back tax paid in South Africa.
What tax refunds do you qualify for?
Double Taxation Agreement (DTA) South Africa
A Double Taxation Agreement is an agreement between two countries that aims to eliminate double taxation of income arising in one country and paid to a resident of another. The agreements are also referred to as tax treaties, but the purpose remains the same – to avoid double taxation.
How does this Double Taxation Agreement work?
A Double Taxation Agreement overrides the provisions of local South African tax legislation. Therefore, even though the tax is paid in South Africa, South Africa might not have the first taxing right to collect such tax. The Double Taxation Agreement will, therefore, determine and prescribe whether tax is exempt in South Africa or not.
Important notice from SARS: South African tax filing season for the 2020 tax year will open on 1 September 2020 (previously 1 July 2020).
The tax treatment of lump sums received from different retirement funds is governed by a Double Taxation Agreement which basically gives taxing rights to either both countries or solely to the country of residence. To determine whether a lump sum qualifies for a tax refund from South Africa, the nature and source of the lump sum need to be established.
If a lump sum qualifies for a refund, an objection must be lodged with SARS to claim the refund. An objection can be lodged up to five years after receipt of the lump sum.
Withholding tax on interest is a tax charged on interest paid to a non-resident individual from a source within South Africa, which is a final withholding tax rate of 15%.
An individual may qualify for a reduced withholding tax rate but the reduced rate doesn’t automatically apply. It becomes necessary to submit a “Withholding Tax on Interest Declaration” to the payer of the interest and this document can be applied for from SARS.
As such, the payer of the interest deducted withholding tax at a higher rate, and the individual might be eligible to request a refund for the overpaid withholding tax if the application to do so is submitted to SARS within three years after payment of the interest. The withholding tax will then subsequently be refunded to the non-resident individual.
Income tax is charged in South Africa on pension and annuity income paid to recipients. Tax relief in terms of a refund is available to tax non-resident individuals – which means South Africans living overseas can claim back tax from SARS.
To qualify for tax relief in South Africa, the RST01 application must be submitted to the South African Revenue Services
(Please note: We do not offer tax stand-alone services and refer similar cases to secure and reputable providers.)
- The RST01 is an application by a tax non-resident for a directive for relief from South African tax for pension and annuities, made in terms of a Double Taxation Agreement. Such application must be renewed annually.
If an individual has paid tax on their South African annuity and pension income, they are able to claim a refund for the tax paid by submitting the RST02 application.
- The RST02 is an application by a tax non-resident for a refund of South African tax for pension and annuities in terms of a Double Taxation Agreement.
It is possible to reclaim tax paid if the individual has spent a part of, or the whole tax year overseas, and has received remuneration from a South African employer.
How does South African income tax affect me?
You are likely to qualify for a refund from South Africa if you:
- Only worked for part of the year
- Worked for someone outside South Africa
- Received a lump sum payment (like a bonus or redundancy)
- Had more than one employer during the year
- Received interest income in South Africa
- Have not filed tax returns
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