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Getting a tax clearance for financial emigration purposes


HadEnoughofJuju

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Hi Everyone,

I just thought I would share this little headache we have encountered with anyone intending to go through this process in the hope that we can spare someone some future pain.

We are busy with financial emigration and one of the things that needs doing is your tax affairs need wrapping up and a tax clearance for emigration purposes needs to be applied for and issued before you can continue with the formal emigration process.

I was (and not so proud to admit this) stupid enough to close my regular bank account. Closing the account was not so much the stupid part as not updating my banking details with SARS before we left. Ironically enough if you owe them money this is not an issue but if they owe you money, SARS won't issue the tax clearance certificate until they have paid you.

The laws have changed (not sure when this happened) as they do in South Africa without the general public ever knowing about it. You can appoint anyone to handle your tax affairs by filing in a special power of attorney form available for download on the SARS website which allows that person to do anything tax related on your behalf.

EXCEPT change your banking details. This has to be done in person, with proof of South African address, a stamped bank statement and a green ID book. Well guess which two of those things are a problem for me at the moment.

There are a couple of extenuating circumstances under which SARS will allow a third party to change banking details:

1: You have to be dead or;

2: You have to be medically incapacitated.

Both of which, I might add, you need a mountain of paperwork to prove.

I guess the 12000 km's between me and the nearest SARS office is not extenuating circumstances enough for them. :angry: If it was just SARS and money they owed me I would just simply forget about it and move on but we have a retirement annuity, some cash in another bank account which we opened for the purposes of the financial emigration which has money in it feom the sale of a trailer after we left, refunds from the Tshwane Metro and the final payment received in the settlement of our house sale. It only amounts to a couple of thousand dollars but those couple of thousand dollars would do just nicely about now.

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Thanks so much HadEnoughOfJuju for the info - will keep that in mind.

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Hi Everyone,

I just thought I would share this little headache we have encountered with anyone intending to go through this process in the hope that we can spare someone some future pain.

Hugo: With the greatest of respect HadEnoughof Juju (HEJ) you post is factually incorrect and although I appreciate your good intention and your utter frustration, I just can;t leave this comment unchallenged. It will make people fear the system and the system you comment on, was copied from Canada and Australia. I am therefore surprised to see your frustration as both an ATO or SARS registered practitioner could have saved you the frustration. We have this continued debate on the fees we charge. Now you can see why?

We are busy with financial emigration and one of the things that needs doing is your tax affairs need wrapping up and a tax clearance for emigration purposes needs to be applied for and issued before you can continue with the formal emigration process.

Hugo: Not entirely true, you can also elect to put in place the necessary safeguards to ensure your emigration is finalised pending tax process. SARB will then accept and emigrate you but will block funds pending the final SARS approval. It appears to me you IT21(a) was incomplete

I was (and not so proud to admit this) stupid enough to close my regular bank account. Hugo: This bit is true and correct yet not such a big disaster as you suggest, we can work around it by obtaining the correct info to file with the IT21(a) as SARS will REFUND you to a foreign account - yes there is also benefits in the new system!

Closing the account was not so much the stupid part as not updating my banking details with SARS before we left. Hugo: You can update and often will have to update SARS after departure. This is not the crisis you make it out to be. See below

Ironically enough if you owe them money this is not an issue but if they owe you money, SARS won't issue the tax clearance certificate until they have paid you. Hugo: This is not true. You can now elect and sign an affidavit you have no SA bank account. Even the 2012 and 2013 IT12 returns already had this option. If you filed your IT12 in the correct sequence you would not have faced this issue and could have updated SARS with a foreign bank account

The laws have changed (not sure when this happened Hugo: Draft law 2009, 2010 and again 2012. Finally implemented Oct 2012)

The Tax Administration Act, 2011 (Act No. 28 of 2011) was promulgated about a year prior to its implementation on 1 October 2012.

as they do in South Africa without the general public ever knowing about it.

Hugo: Now this is where I think one has to alert readers to unfair expat comment! It was a very public process and remains to be so, see the landing page at www.sars.gov.za for the Whats New Link

EXCEPT change your banking details.

Hugo: You are not correct HEJ. If you did the formal emigration process correctly, you would have been in possession of the TRC issued by ATO and with that anyone could have amended your bank detail provided they had originals. The rules will be posted below for all to read.

8 NON-RESIDENT TAXPAYER
• In the case of a taxpayer who is a non-resident, the following documents are required:
! SARS Power of Attorney appointing a person as a duly authorised agent;
! Original or a temporary identity document/passport/driving licence of the appointed person and
a copy thereof;
! Certified copy of the identity document/passport/driving licence of the non-resident taxpayer;
! Where the taxpayer is temporarily outside the Republic, original letter of secondment from the
employer confirming that the taxpayer is temporarily outside the Republic for a specific period.
The letter should not be more than three months old; or
! Where the taxpayer is an expatriate, an original letter from the South African employer
confirming that the taxpayer is temporarily in the Republic for a specific period. The letter should
not be more than three months old; or
! Where the taxpayer is an emigrant, a copy of a Residency Certificate from a country of
residence;
! Copy of the bank statement with the original bank stamp or ABSA eStamped statement not
more than three months old that confirms the account holder's legal name, account number,
account type and branch code where applicable; or in the case and only based on exception
where the taxpayer opened a new bank account and cannot produce a bank statement, an
original letter from the bank on the bank letterhead with the original bank stamp confirming the
account holder’s legal name, account number, account type, branch code and reflecting the
date the bank account was opened, and
! Copy of proof of residential address of the non-resident taxpayer.
Edited by Hugo2
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HEJ

thank you once again for the good intention shown, but honestly it seems like someone did not guide you correctly and I would love to know who was the failing banker. But this is a classic case of where an hours consultation could have saved you hours of frustration. Unlike others insisting to control and take over your process, I am able to assist through telecon advice. I charge in units of 6 minutes and for a few bob your stuck process can be re-activated. Alternatively send me an email and I will try and identify the issue before the telecon.

For those who wish to or need to change their bank details, feel free to make contact, I will accept and execute based on the PoA, once all the originals as listed above is in SA. And where you use local or foreign accountants, no need to terminate their services, I will gladly assist them as well. My true client base is my colleagues in SA, Australia or wherever Wegkaners live. On twitter I am WEGKANER best friend or @hugotaxforum.co.za. My web is www.taxmigration.com

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Hi Hugo, thanks for the response. With all due respect though I don't see the point in paying a fee for a service that is equivalent to the amount of money I want to get out of the country in the end.

I have a tax consultant that has many overseas clients who have emmigrated and left businesses and other assets back in South Africa. All my tax affairs are up to date and the only thing outstanding for the completion of the process is the tax clearance.

Standard Bank's Foreign Resident division are handling the SARB application and are awaiting the clearances to complete the process.

I appreciate that the law allows for the changing of banking details under certain circumstances, but try explaining that to the invidual drone worker sitting behind the counter doing the work. They've been told that banking details have to be changed in person with no exceptions.

I haven't been able to find a link to any dowloadable SARS power of attorney forms where it doesn't say "with the exception of banking details" in the part where you select the powers you bestow on the third party.

Yes I am frustrated and annoyed by the system and it may have been copied from the Aussie's and Canadian's but it's been run with a third world mentality and quite frankly it #$/^/## me off.

I am in no way annoyed with the ATO though, I think they are awesome, I haven't been to an ATO office once. I've registered for a TFN, confirmed my residency status, updated my banking details and filed 2 tax returns since we've been here and it's ALL been done online without a single glitch. So much for South Africa copying the Aussie system if you ask me.

Again forumites, yes it may be possible to sort this stuff out after the fact (which will cost you a fortune) but I would say a simple trip, even if you have to take the day off, to the local SARS office before you leave to update your banking details is worth it.

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Hi HEJ

I am no longer with Cashkows.com and can't comment on their offering. Mine, before and after I was with Cashkows.com has always been based on time spent i.e. Not a fixed fee arrangement. Some like it, some prefer Cashkows.com fixed fee option. It's a personal choice.

The tax emigration clearance, unlike all other tax clearances and good standing, is NOT an online process and therefore you will not find the appropriate POA online.

That is part of the value add I offer, I will assist with the offline process, giving DIY advice should you prefer so. Cashkows.com has developed (at huge cost) a specific IP which allows you to complete everything online and they prepare (thus include in their fee) all the required forms and mandate. Their fee is therefore justifiable albeit not suitable for one and all. But it is a fair fee!

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HEOJJ,

I'm with you mate. I found SARS to be a pain in the @ss but the ATO to be a breeze. I fought with SARS for 3 years to get my money out of them. Quite possibly some of the dumbest replies in my life have come from them, but even they are no match for the SABC licence department!

Sorry to hear of your woes, I got a tax clearance certificate out of them EVENTUALLY after a major fight, but then even AFTER I complied with the requirement to have a Power of Attorney to grant an uncle the power to collect it (They wont post it!) they refused to give it to him. Idiots. Try this on for fun, deregister as a taxpayer. What a joke, NOTHING on their website, and almost NOWHERE on any web search on how to do it. I wonder why? Devious sods they are. nothing anyone can say will change my mind, I fought with them on common sense and process, and in the end, they capitulated and I got my money. mercy they had my old bank account and I could draw it from here...but at a cost of over R100 a pop. Thieving banks.

Hope you get your cash soon matey.

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HEOJJ,

Mate, if you have a mate back in SA I'm sure you can angle this one. Oh yes, by the way, SARS DO allow payments into a foreign bank account..there was a court case they lost some years back, one of the few I know of.

So if your want your beloved Rands planted into your Aussie palms, go that route. Ps, since I don't trust the sods I suggest a one off bank account here in Aus. Sorry, bad experiences with stuffed up debit arrangements and then fights to get my money back....

Don't give up mate.

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Hey mate, not giving up, just taking the day off. I will get my cash just to spite them. I have a tax consultant in RSA dealing with the mentals at SARS, but they are making life difficult, special POA or not. :boxing:

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  • 2 weeks later...

Hey Guys.

I was reading the post regarding obtaining the SARS Tax Clearance. What would be the purpose of this Tax Clearance? I.e. At which point will I actually need to present it?

Also, I'm leaving for Aus in a month so I'd like to finalize all my affairs. I'm happy to do my own tax returns ... could you possibly give me an outline of what I need to get done:

I.e. What of the following do I do, and what forms do I use:

- Notifying SARS of change of residency status

- Submitting a final tax return for the current tax year.

- Deregistering as a Tax Payer (Do I need to do this?)

- Obtaining Tax Clearance

etc.

Thanks very much.

Regards

Itai

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Hi Itai,

I have sent you a PM with more information on your questions, please feel free to contact me .

Tanya vd Westhuizen

Fx Capital

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