Tax clearance

[Ready2go]

Having a blonde moment !

We will be going over on PR. Am relocating. Do not have loads of cash, so no where near the R2mil per family.

Do I still need a tax clearance to move my pennies ?

Any advice please.

[Ebreyten]

Hi,

If you are taking a small amount like R1000 or so then no. If it is a bit more you might have too. Don't know all the details but I know if it is a large amount then you must. I'm not sure from which amount you should apply for a tax clearance, but I would just to be on the save side because SARS do change their minds on a daily basis.

Cheers

E

[Just B]

Ready2go,

The government wants it's pound of flesh. It just to ensure that all past tax obligations have been met and that all taxes are paid for large sums of money.

B

[Ready2go]

Thanx guys,

Should have known that i couldnt just quietly slip out the back door !

[Just B]

Thanx guys,

Should have known that i couldnt just quietly slip out the back door !

When emigrating to OZ it's like leaving with the trumpet sounding, no back door. It's probably better anyway. You don't want something coming up and bitting you later.

[Ready2go]

You're absolutely rite.

You just never know what the future holds. Fortunately our taxes are up todate.

[TYTAN]

Hi ReadyToGo

Tax clearance is only required if taking more than R2m offshore. The 2008 budget gives entitlement to take up to R500k per person per annum out of then country as a travel allowance.

If you are taking more than R500k out, submit a tax clearance application, a statement of the account where the funds are held, and all your FICA docs to your nearest SARS office and less than a month later you should be presented with a Tax Clearance Certifiacte. Its really an easy process... dont stress

Ty

[JDJoburg]

Hi ReadyToGo

Tax clearance is only required if taking more than R2m offshore. The 2008 budget gives entitlement to take up to R500k per person per annum out of then country as a travel allowance.

If you are taking more than R500k out, submit a tax clearance application, a statement of the account where the funds are held, and all your FICA docs to your nearest SARS office and less than a month later you should be presented with a Tax Clearance Certifiacte. Its really an easy process... dont stress

Ty

Hi Ty

That's not quite correct. If you want to take out anything more than your R500 000 discretionary allowance (this allowance now includes the previous "travel allowance"), then you require not only tax clearance from SARS, but also permission from the Reserve Bank, because you'd be utilising either your foreign investment allowance or your emigration allowance. The investment / emigration allowance is capped at R2mil per person (and 4 mil per family for the emigration allowance) and you'll have to pay a "penalty" of 10% on the excess amount, if the Reserve Bank approves it.

Cheers

Danie

[polly]

They refuse to give us our money without a tax clearance and it is MUCH less than R500 000.

[Wantbetter]

Hi

The bank won't let you tranfer any funds offshore without a tax clearance certificate (if it is to yourself), or an invoice etc, if it is as payment for something.

Wantbetter

[JDJoburg]

Polly and Wantbetter

Yes, you always need tax clearance as well as the Reserve Bank's permission, unless you are using your travel / discretionary allowance - to do that, you just need to have a plane ticket dated not more than 60 days in advance. You can then transfer your money offshore, including to your own bank account.

[TYTAN]

Hi Ty

That's not quite correct. If you want to take out anything more than your R500 000 discretionary allowance (this allowance now includes the previous "travel allowance"), then you require not only tax clearance from SARS, but also permission from the Reserve Bank, because you'd be utilising either your foreign investment allowance or your emigration allowance. The investment / emigration allowance is capped at R2mil per person (and 4 mil per family for the emigration allowance) and you'll have to pay a "penalty" of 10% on the excess amount, if the Reserve Bank approves it.

Cheers

Danie

Hi Danie

Tax Clearance alone should suffice. You only need "permission" form the Reserve Bank if you have told them you are Emigrating... Personally, they don't need to know that... You can apply for tax clearance and send money offshore without plane tickets, or reserve bank permission. A tax clearance certificate is definitely enough - I should know, I did it for several people whilst working in the finance industry in SA.

This is of course unless the laws have changed in the last 7 months...

Ciao

Ty

[JDJoburg]

Hi Danie

Tax Clearance alone should suffice. You only need "permission" form the Reserve Bank if you have told them you are Emigrating... Personally, they don't need to know that... You can apply for tax clearance and send money offshore without plane tickets, or reserve bank permission. A tax clearance certificate is definitely enough - I should know, I did it for several people whilst working in the finance industry in SA.

This is of course unless the laws have changed in the last 7 months...

Ciao

Ty

Unfortunately not, Ty. Unless you use your discretionary allowance (the R500 000) which can admittedly include loans and gifts (for which you don't need a plane ticket), you need permission from the Reserve Bank, because you'd be utilising your foreign investment allowance, which is limited to R2 mil per person. This is something other than the emigration allowance.

If you send your money offshore without the SARB's permission (under the premise that it's a loan or a gift to someone), you'll be breaking the law, pure and simple.

The law is very clear on this - we've had exchange control for yonks, so I'm not quite sure how you managed to beat the system for your clients.

I'm a lawyer working in the finance industry and I deal with these issues regularly.

Cheers

Danie

Edited September 30, 2008 by JDJoburg

[TYTAN]

Unfortunately not, Ty. Unless you use your discretionary allowance (the R500 000) which can admittedly include loans and gifts (for which you don't need a plane ticket), you need permission from the Reserve Bank, because you'd be utilising your foreign investment allowance, which is limited to R2 mil per person. This is something other than the emigration allowance.

If you send your money offshore without the SARB's permission (under the premise that it's a loan or a gift to someone), you'll be breaking the law, pure and simple.

The law is very clear on this - we've had exchange control for yonks, so I'm not quite sure how you managed to beat the system for your clients.

I'm a lawyer working in the finance industry and I deal with these issues regularly.

Cheers

Danie

Hi Danie

Perhaps we are talking about the same thing with different terminologies or just missing each other's points...or something....

To obtain the Tax Clearance Certificate, you would submit your Fica docs, proof of funds in the account ,and Form FIA001 (Application for Tax Clearance in respect of Foreign Investments). Sars should process this within 28 days (if you fax it through) or within 7 days (if you hand it in at a SARS Office personally) and issue you with the Tax Clearance Certificate.

Then, to send the money offshore (R2m max with zero tax penalties), you would submit the tax clearance certificate (along with a BoP form and form MP1423 - SARB Exchange Control (perhaps this is what you are referring to as permission from the Reserve Bank?)), and then complete a swift to make transfer (or one of several other different methods)

This is all that is required. Without doubt. And it is legal.

Cheers

Ty

Tax_Clearance___FI.pdf

Exchange_Control.pdf

[JDJoburg]

Hi Danie

Perhaps we are talking about the same thing with different terminologies or just missing each other's points...or something....

To obtain the Tax Clearance Certificate, you would submit your Fica docs, proof of funds in the account ,and Form FIA001 (Application for Tax Clearance in respect of Foreign Investments). Sars should process this within 28 days (if you fax it through) or within 7 days (if you hand it in at a SARS Office personally) and issue you with the Tax Clearance Certificate.

Then, to send the money offshore (R2m max with zero tax penalties), you would submit the tax clearance certificate (along with a BoP form and form MP1423 - SARB Exchange Control (perhaps this is what you are referring to as permission from the Reserve Bank?)), and then complete a swift to make transfer (or one of several other different methods)

This is all that is required. Without doubt. And it is legal.

Cheers

Ty

Yes Ty, the second form IS the application for Reserve Bank permission! Sorry for being so pedantic (that's why lawyers have few friends ), but there is a distinct difference between tax clearance and Reserve Bank approval, even though the process is not difficult - your bank will usually submit the application on your behalf.

Glad we're talking about the same thing.

Have a nice day.

Danie

[TYTAN]

(that's why lawyers have few friends ),

I just pi**ed myself...

Have a lekker day boet!

[Donne']

Hi Danie and Ty ,

You guys seem to know what you are talking about - so a question - we are leaving in the near future but due to the nature of my business (fashion ) I work 6 months ahead-I will therefore ,not be able to get a tax clearance untill the last outstanding monies are collected ,about July next year . I have been told that this will not be a problem when I exit the country .Any comments ?

Thanks for the interesting (and sometimes funny ! )posts .

regards

Donné

[TYTAN]

Hi Danie and Ty ,

You guys seem to know what you are talking about - so a question - we are leaving in the near future but due to the nature of my business (fashion ) I work 6 months ahead-I will therefore ,not be able to get a tax clearance untill the last outstanding monies are collected ,about July next year . I have been told that this will not be a problem when I exit the country .Any comments ?

Thanks for the interesting (and sometimes funny ! )posts .

regards

Donné

Hey Donne

You can make more than one application for tax clearance, provided the combined value of the applications don't exceed R2m per person. So, you could apply for a certificate now for the money you do have ready to send over, and then again in 6 months for the remaining portion (again, provided the total of both combined is not in excess of R2m per person).

This would seem to be the easiest way. Maybe Danie has another idea also.

Good luck.

Ty

[Donne']

Hey Ty ,

Thanks thats cool .So........I presume that if I am not taking any money out with me at this stage ,I do not need a tax clearance ?

Donne'

[Just B]

A couple more questions for those in the know.

1) When you take an air ticket, does this include the e-mail confirmation received as apposed to the boarding pass?

2) The discretionary allowance includes moneys transferred to AU bank, and carry cash for the trip and the first day or so?

You assistance will be greatly appreciated

B

[JDJoburg]

Hey Ty ,

Thanks thats cool .So........I presume that if I am not taking any money out with me at this stage ,I do not need a tax clearance ?

Donne'

Hi guys

Yes Donne, you only need tax clearance and reserve bank permission when you actually take money out. And when you do take money out, you can first use the R500 000 travel / discretionary allowance for which you don't need tax / reserve bank clearance. Thereafter, you'll avail yourself of the foreign investment allowance, for which you'd apply for clearance.

As a matter of interest, since the whole issue of "tax clearance" and "Reserve Bank permission" sometimes causes quite a bit of confusion, the principle is basically this:

The Reserve Bank is in charge of exchange control in South Africa, and you may only take money out of the country with their permission. However, they will not process your application unless you can prove that your tax affairs are in order - this is to assist SARS in enforcing tax compliance. Thus, you first apply for a certificate of good standing from SARS (which essentially has nothing to do with taking money out of the country); once you have this certificate, it is attached to the foreign investment application and submitted to the Reserve Bank for approval. The relevant forex dealer, such as your bank, will usually do this on your behalf.

So, it's never a question of "do I need tax clearance or do I need Reserve Bank clearance?" - what you ultimately need is Reserve Bank clearance, but that will not be granted if you cannot provide a certificate of good standing with SARS. (That's why Ty and I were initially arguing in circles - it is two separate processes, but the one is useless without the other )

Cheers

Danie

[JDJoburg]

A couple more questions for those in the know.

1) When you take an air ticket, does this include the e-mail confirmation received as apposed to the boarding pass?

2) The discretionary allowance includes moneys transferred to AU bank, and carry cash for the trip and the first day or so?

You assistance will be greatly appreciated

B

1) an e-ticket will suffice

2) Yes, that's correct

[polly]

From our experience, organise the tax xlearance before you leave, even if you aren't taking money out immediately. We are having a mission organising it from Aus.

[TYTAN]

I'm thinking that this topic needs to be linked to the important topics list at the top of this section ("Money"). It has come up several times and the questions are all pretty similar.

Can one of the hosts arrange this please? If you think its worthwhile...

(Did not know where to pose this suggestion other than in this thread... )

Edited October 1, 2008 by TYTAN

[Mike and Nicole]

Polly and Wantbetter

Yes, you always need tax clearance as well as the Reserve Bank's permission, unless you are using your travel / discretionary allowance - to do that, you just need to have a plane ticket dated not more than 60 days in advance. You can then transfer your money offshore, including to your own bank account.

Hi JD.

Yes, that's what we have done. Because we're taking less than 500k, it's less than the travel allowance deal, we've been able to transfer our money with only the air ticket and passport. What you'v said previously, if I understand correctly, is that you only need the tax clearance certificate if taking more than the 500k allowance, and then you also need the approval from the reserve bank ?.

Mike.