We receive more and more requests each day from Expats requiring assistance with their tax, both from South African’s living abroad and foreign nationals. While we have covered Expatriate tax in two previous blog articles – Expat Tax Services and Expatriate tax in South Africa – I thought it may be valuable to list some of the high level tax considerations and implications affecting Expats living in South Africa as well as South Africans that have moved or plan to move abroad to become expatriates.

Expat tax when immigrating into South Africa

If you have moved to South Africa recently, then we send a warm South African welcome to you. Whether you have taken up permanent residency here or are just relocating for an indefinite time, here are some basics about tax in South Africa.

• If you earn an income in South Africa, you are liable to pay tax. This is any income be it interest earned, rental income received, etc.
• You are subject to the same taxation rates as a South African resident but then also the same deductions.

There are however a number of factors that can affect your tax status such as if your employment is temporary or a foreign government employs you. It is therefore advisable to contact a tax consultant to ensure you are conducting your tax affairs in a manner that is compliant. Read more about expatriate tax here and feel free to contact us to set up a consultation.

Expat tax when emigrating out of South Africa

If you are a resident of South Africa and are planning to move abroad or have recently relocated, the following could be of interest to you.

When it comes to emigration and tax, there is an important differentiation to be made between ’emmigration’ and ‘relocation’. One that could potentially have huge tax implications.

‘Relocation’ is seen as moving to a different country usually for employment but without exporting any of the assets from your country of residence.

‘Emigration’ on the other hand is regarded as leaving your country of residence to permanently settle in a new country and taking many of your assets with you.

‘Emigration’ has serious tax considerations as SARS (South Africa Revenue Service) will reclassify you as a non-resident for tax purposes and will therefore see you as selling your assets (even if you still retain ownership) in South Africa. This makes you liable to pay Capital Gains Tax on all assets except fixed property and income tax on any trading stock you own.

There are however specific allowances for taking assets out of the country as well as allowances for offshore investments. If you are thinking of emigrating, it would be well worth contacting a tax consultant and discuss the cost vs benefit of relocating opposed to emigrating.

For more information about expatriate tax services, feel free to contact Dirmeik Consulting on
Cape Town: 021 421 4444,
Johannesburg: 010 007 3026,
Durban: 031 007 0881