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When considering emigrating, it is vital to ensure that your tax affairs are in order with SARS and that you understand the ins and out of the tax emigration process.  You will need to obtain an emigration tax clearance certificate that will verify that your taxes are up-to-date.  To become a complete non-resident for tax purposes, you will need to cease being a South African tax resident as defined by the Income Tax Act.  However, you can also change your tax residency without having to financially emigrate.  This all depends on how much time you spend in the country, which is usually in excess of 91 days during a tax year and where your assets are based and, of course, your primary residence is situated.  SARS will determine how you will get taxed and Home Affairs will document your citizenship status in South Africa.

Once you, as a taxpayer, have decided to emigrate fully to another country, the selling of your assets is impacted by CGT (Capital Gains Tax) or Exit Tax, which can range from anything between 7.2% to 18% depending on the tax bracket that you may fall in.  SARS will require you to register a provisional tax return if your taxable income exceeds R1 million in that tax year.  This tax will become due on the day before the taxpayer becomes a non-resident of the country.

Once you have decided on the type of financial emigration status you want to follow, your South African bank account will be re-assigned for exchange control purposes and be subject to the applicable exchange control rules.  All your remaining proceeds from the sales of your assets will be deposited into an unblocked rand account, after which your bank will follow the correct administration process.

Remember that the onus is on you to inform SARS of your pending tax status change and it needs to be done in the tax year that the change occurs.  If this process is not completed timeously, then SARS can levy administration penalties up to 200% depending on the situation. 

Changing your tax status is a laborious and an admin-intensive process as you deal with different departments and parties at one given time, so many people choose to rather involve a professional service to manage this rigorous procedure.  This is where the knowledgeable and skilled experts at Experity Accounting Services can lend a hand.  We will assist you in ensuring a smooth, effortless transition of the process.  Get in touch with us at info@experity.co.za for a consultation and personalized tax advice support before emigrating.  Our top-notch specialists guarantee hassle-free efficient backing through the entire process.  So don’t delay, get into contact with us now.