APPLY NOW!
Non-Resident Tax Status Confirmation Letter
SARS IS NOW OFFICIALLY ISSUING CONFIRMATION OF TAX NON-RESIDENCY LETTERS
As a Tax Resident, you are legally required to submit tax returns to SARS every year and declare your worldwide earnings (local and foreign) and then claim any exemptions or tax credits on the foreign earnings.
Importantly, if you do not formally note yourself as tax non-resident with SARS, then you will be seen as a tax resident in SA. Even if you have broken our tax residency tests, being the ordinarily residence test and physical presence test, or there is a Double Taxation Treaty in place, these factors are not going to automatically change your status to tax non-resident. The only way to change your tax status is to formally undergo the relevant legal processes through SARS.
SARS has recently introduced a “SARS Non-Resident Tax Status Confirmation Letter” (see example for reference). This letter was not previously a requirement of the emigration process.
The SARS Non-Resident Tax Status Confirmation Letter is a letter confirming that one has ceased to be a tax resident of South Africa with an indication of the effective date tax residency was ceased.
To be able to apply for the SARS Non-Resident Tax Status Confirmation Letter one must have already completed the financial emigration (ceasing of tax residency) process through SARS.
SARS will then issue the additional confirmation letter confirming tax non-residency, as the TCS pin for Emigration is only valid for 1 year from date of issue.
WHAT IS A
NON-RESIDENT
TAX STATUS LETTER?
BENEFITS
OF CEASING YOUR TAX RESIDENCY
After ceasing your tax residency, you will start to enjoy the many benefits of being an SA tax non-resident, hence the importance of having all the necessary and correct documentation.
Financial Emigration also provides the rare opportunity to encash your retirement annuity in full once you have been tax non-resident for 3 years.
- You will be taxed on South African sourced income only.
- Capital gains tax will only be applicable on fixed property located in South Africa /assets of permanent establishment.
- No other capital gains tax.
- No world-wide tax even on remittances.
- No donations tax and / or estate duty.