Immigration

Immigration what Now?

Immigration can certainly be overwhelming when considering the multitude of details and decisions that have to be made. Though it may seem like the hard part is over once you've settled on your plane, the real challenge begins when you have to make a fresh start in another country with different regulations and cultures. Not just for locating grocery stores, but for learning about South African tax requirements living abroad - it can all become an intricate puzzle.

Here are my top tips for South Africans living in Another Country on Tax Residency.

Both countries retain their tax residency unless you give up your country-of-origin tax residency status, you will by default be a tax resident in both South Africa and your new country.

Impact on taxable income

As of 1 March 2020, South African Tax Residents need to report their global income to the South African Revenue Service (SARS). This means having to declare in South Africa what you have earned in your current country, similar to revealing this information to the Current Revenue Agency. If your tax rate is lower than your Current Countries tax rate then you will pay extra tax on your Current income when filing with SARS (this includes the double tax treaty allowance between both countries).

Financial Emigration & Tax Residency

It can get confusing, but your tax residency status is not directly linked to your citizenship in South Africa – in other words, you can be a South African citizen but not a tax resident (and vice versa).

There are a few more steps to financial emigration, which we'll discuss in another article, or you can reach out to me personally to discuss your unique situation. If you decide to give up your South African tax residency status, your discretionary assets (other than fixed property and retirement assets) will be subject to Capital Gains Tax. The market value in South Africa will then become the base cost of the assets in your new country.

If you are a non-tax resident in South Africa, you will still need to file a tax return for any income earned in South Africa.

You can contact TaxAssist via many avenues, all of which are displayed on our Contact page.