SARS, Reserve Bank, Tax Clearances - Help!

[BonnieBecker]

Hi All

My husband and I are leaving SA on 21 July 2013.... So excited but also just trying to tie up the loose ends here!

We have had such issues with trying to get our tax clearance certificates done. We have been told that we can only apply once our tax is done for 2013! Goodness knows how people have managed to do this if they emigrate before tax season?(insert sarcasm here) Anyway... apparently one must also register to allow themselves to leave SA, a part of this includes filling out the MP336( form from the South African Reserve Bank? Could someone who has been through this process provide me with some sort of advice etc as we basically have 3 weeks left and with the level of incompetence here, where no one seems to know what I am talking about and it's their job, I am worried that we are going to run out of time!

Kind regards

Bonnie

[Jordy]

Why would you want to formally emigrate prior to leaving? After 5 years of living in Aus I still havent done it. So why the rush? You do not need to do it, in fact my opinion is that it would be better to wait a year or two. You will still have lose eneds financially to tie up such as this years tax return (end of Feb 2014). For that you will require a open bank account.

[BonnieBecker]

Hi Jordy

The main reason has been that I cannot access my RA funds without a tax clearance certificate and the completed emigration application form from the South African Reserve Bank. I would love to just leave it as I am seriously over the admin But also do not want to leave that money here... Any suggestions? I am going to leave my personal banker with power of attorney of my account here in SA, although it will show as a blocked account. My stepmom works at SARS and she explained that one cannot leave SA without a Tax Clearance certificate and SARS won't issue me with one until I show them the Emigration form from the SARB. So confused!

[Jordy]

Well your step mom would know but I would guestimate that 99% of people have left without a tax clearance certificate. If you dont formally emigrate you are considered a "South African resident temporarily abroad" even if you have PR and never intend to return. The RA thing could be done at a later date from this side.

Look I would think that companies like Cashcow etc who specialise in this could advise you. Why not give them a ring?

[BonnieBecker]

Thanks Jordy! I will do just that. So basically you do not need to provide a tax clearance for anything in Oz? I feel better already.

[dkm]

Our agent suggested exactly what Jordy has spoken about. In fact, he said ensure that you DO NOT say you are emigrating, for both bank and the container company.

[ace]

Even if you need a tax clearance certificate you could obtain one before tax season opens. ive obtained many tax clearance certificates for my clients in recent months. as long as your tax affairs are up to date currently you can get a tax clearance certificate. in actual fact I got myself a tax clearance certificate in may this year.

[HadEnoughofJuju]

There are three types of tax clearance certificates one if which is for the formal emigration process. You can only get that one if your tax affairs are up to date and it's requested after your last tax return is submitted. On the clearance certificate it asks what your expected departure date from South Africa is and you also need to nominate a tax representative to file the final tax return.

It's the only way you can cash out your RA before the age of 55. Our tax advisor suggested that we make the policy paid up and just leave it until we are ready to go through the process. You will also need to close all bank, clothing, cell phone and any other account you or your partner have in their name expect for keeping one savings or cheque account that can be converted to a non-resident account before you can start the formal emigration process.

We were told by our tax consultant that even if we are not in South Africa, because we are registered for tax we still need to do tax returns even if they are 0. Not sure what will happen if we don't and many people haven't so I guess it's a personal choice.

[BonnieBecker]

@ Ace. We did go into SARS this week and they would not issue a tax clearance certificate until tax season opens on Monday. I am guessing it is just a matter of them not knowing their jobs as they did seem to be very confused.

@HadEnoughofJuju. Are you planning on going through the process eventually or are you just going to continue using your selected tax representative to do your tax? Maybe I will just leave my policy... I just better find a job soon as I would have felt better with the extra cash as a safety net

Thanks for all the feedback. Really appreciate it

[HadEnoughofJuju]

I just have to fill in the forms to cancel our credit card, which by the way is the only account type you can close from outside the country, and once that is done I will start the formal emigration process.

If you are going to leave the policy then just make sure that you make arrangements to make it paid up. If you don't and you don't pay the premiums you will be penalized.

Something I forgot to mention is the fact that if there is an inheritance in the future that you will not be able to get the money out very easily if you haven't gone through the formal emigration process. You are also going to have issues getting your RA money as well.

[Pertheption]

_{Sorry I might be going off topic but does it matter if you book a one way air ticket to Aus or a return? I mean will you need a tax clearance certificate then? I heard that if you book a one way you are effectively telling SA that you are formally emigrating and then you have to pay all your debts off before you leave. I think this is rubbish but I would just like clarification. I plan to take as much cash with me as possible and pay off my debts from there or via internet banking. Luckily I don't have any RA's.}

[chzaau]

Just be careful our banks only hold documents for 5 years. So if you have done the formal thing they can ask you to give them a updated sars certificate. So what I'm saying is that say you have an inheritance 10 years later good chance of being requested for a new clearance.

[Heymanse]

I am probably one of the few people on this forum that believes in formal emigration prior to leaving RSA. I did not want to go through the hassle of getting everything tied up from another country or appoint someone and pay them to do it for me. For us it was not a difficult or cumbersome process. We simply made an appointment at the foreign exchange branch of our bank who gave us the necessary forms to fill in and guided us through the process and set up our blocked rand account. We went to SARS offices personally one morning very early and got our tax clearance certificates. After about 2 years in Australia I finally had all my blocked rand account closed by sending a simple email to our exchange control officer.

So if you atill want to go ahead with formal emigration, then I would suggest you visit the foreign exchange branch of your bank and go from their. Personally I believe a little effort now will save a lot of headache once your here.

That's my 2c anyway...

[Heymanse]

_{Sorry I might be going off topic but does it matter if you book a one way air ticket to Aus or a return? I mean will you need a tax clearance certificate then? I heard that if you book a one way you are effectively telling SA that you are formally emigrating and then you have to pay all your debts off before you leave. I think this is rubbish but I would just like clarification. I plan to take as much cash with me as possible and pay off my debts from there or via internet banking. Luckily I don't have any RA's.}

I only paid up our credit cards and other small loans. We still had 2 cars that a dealer were trying to sell. Those instalments were paid for about 6 months after our departure from our blocked rand account. I then emailed our control officer and advised them that the debit order should be cancelled. And that was the end of it. I could have money transferred from my RSA account to Aus account and vice versa at any time by only sensing an email.

Edited June 29, 2013 by Heymanse

[HadEnoughofJuju]

_{Sorry I might be going off topic but does it matter if you book a one way air ticket to Aus or a return? I mean will you need a tax clearance certificate then? I heard that if you book a one way you are effectively telling SA that you are formally emigrating and then you have to pay all your debts off before you leave. I think this is rubbish but I would just like clarification. I plan to take as much cash with me as possible and pay off my debts from there or via internet banking. Luckily I don't have any RA's.}

The only time you are recognized as having formally emigrated is when you apply to the SARB snd make it official. The only way you can book a one way ticket is through IOM and the only documents they require from you is a copy of your passport and visa grant letter.

There is a moral debate about do you pay your debt off before you leave or not. You don't need a tax clearance before you leave.

As far as inheritance money goes, if you have not formally emigrated, the only way you can get the money is to be in the country to accept the payment.

[chzaau]

I can book a one way ticket without any problem through which ever airline I decide to travel with, I've booked quite a few one way tickets in the past.

[Sunnyskies]

Agree, you don't need to formally emigrate. However, having gone through the pain of having to get a tax clearance certificate to remit funds out of the country very recently I would recommend that you do the following:

1. get your tax returns done - you won't get a tax clearance certificate to remit funds without your returns all being up to date and if necessarily audited (and as tax season for 2013 is now opening that will include doing your tax return for 2013). You can remit your annual travel allowance (if you have a return ticket - that is what my bank told me) and that gets a fair amount out without the tax clearance certificate. If you think you want to use your investment allowance try and get your tax clearance done. As it is very schleppy. One of the things that they wanted was an original bank statement not older than 7 days when provided to SARS - impossible to do from this side of the world.

2. make sure your fica documents are up to date at SARS (I had a lot of hassles over that with them wanting me to arrive in person at their offices. In the end I had to give my sister a power of attorney to deliver documents that proved I live at the address that is already on their system);

3. advise your bank that you will be a SA Resident Temporarily Abroad. Your account will be flagged appropriately and you will be asked not to use any credit cards outside of South Africa. But you can still transact on the account for things in South Africa, and you can use your credit card for SA expenses (good idea if you still have assets in SA after leaving).

4. make sure your FICA at the bank is up to date (in fact make sure FICA everywhere is up to date). It doesn't matter if you are still using your SA address.

[BonnieBecker]

@ Sunnyskies. Thank you for your response. I will be taking your advice and speaking to my broker and personal banker today.

[Bradporter]

@bonnieBecker.

I am leaving on 29th July to go over to Brisbane. if you want to get rid of all the headaches contact Cashkows in Cape Town and they will do everything for you from relevant tax clearances, trasferring your funds at better rates than the high street banks, final tax returns, deregistering you as a tax payer in RSA (not formal immigration), once you have your ATF number (this permits you to get your RA's and penion funds etc released and paidinto your Oz account)

You will get this all done in a matter of days.

Register on site and they will call you within a day. There's no way I was in the mood for trying to do all this myself. You will literally have a pain free experience.

WWW.cashkows.com

I dealt with Pieter Muller at the following e-mail address

Pieter@cashkows.com.

You can't go wrong.

[Bradporter]

You have a R1 million rand discretionary allowance per person per year that you can transfer without submitting a tax clearance. If you need to transfer more than that then you would need a tax clearance certificate which would allow you another R5million for the year.

For a pain free experience get hold of Cashkows, they really are the answer. They also have offices in Australia which assists you with the final leg.

[Bradporter]

HEOJJ,

i have been told by Cashkows that once I get my ATF number, I submit it too them and they will complete the process in RSA. They will ensure that I am de-registered as a South African tax payer ( even though no formal i migration process has been done).

No more tax returns are required.

You status quo will remain for five years. Ie if you return to RSA within five years, they merely reverse the process. After 5years you would have to formally re-register as a tax payer.

[BonnieBecker]

@ BradPorter. I will contact Cashkows and get their advice too. Thanks Just want to know. Where does the South African Reserve Bank form MP336b fit into this? As in order to get my RA paid out, I have to have that form completed and on the back of the form it states: "I/We have no plans to return and work in South Africa within a period of five years from the date of my/our emigration. I also declare that if I/We permanently return to South Africa within five years from the date of my/our emigration, all funds exported from South Africa will be returned to South Africa, other than the applicable foreign capital." This sounds very official and could be a bit of a headache if we decided to return to South Africa (which we aren't planning on doing - but like to be prepared for anything). Let me know if you filled in this form, but I will speak to someone at Cashkows today. Thanks again

[Bradporter]

Hi Bonnie,

Don't recall filling in a MP336b. I would however assume that i would only need to fill it in once I get over to Oz and have submitted them with an Australian Tax file numbr (ATF). Only once you have been registered as a taxpayer in a foreign country and de-registered in RSA as a tax payer will you RA's be released (subject to paying taxes).

I wouldn't be too concerned about the fine print w.r.t returning within a five year period, ultimately there's no a hell of a lot they can really do to you if you no long have the funds. You have also paid your taxes on tose funds prior to them being transferred overseas anyway.

Let us know how you progress and whether Cashkows was any assistance.

[Heymanse]

Because we decided to formally emigrate we completed the MP336b - that was done in conjunction with the creation of the blocked rand account. You do not need to have an Australian Tax file number in order to fill in the form MP336b. Here are some guidelines when you visit your bank's exchange control branch (this is an example I found from FNB):

Important Guidelines to Emigration

The process

To formalise emigration you will be required to complete form M.P.336b at your local FNB branch.

You will be interviewed by one of our consultants who will help you with the completion of the form and inform you of any required documentation.

Please bring the following with you:

• South African Identity Document/Passport
• Any documentation confirming that you are entitled to take up permanent residency in the new country of domicile.
• Original documents for any assets declared, such as title deeds, share certificates, and policies.

Any liabilities (borrowings) need to be expunged (paid off) before you leave South Africa

• FNB Credit Card/s
• Overdraft facilities
• FNB Vehicle Finance
• Unsecured Loans

Prior to departure all issue access mechanisms must be cancelled and destroyed, such as:

• Cheque Book
• ATM Card/Debit Card
• FNB Credit Card

Please update any contact details abroad (if available) with your FNB branch, such as:

• Residential Address
• Postal Address
• E-mail Address
• Contact Telephone Numbers

Foreign Capital Allowance

Within South Africa there are certain limitations on the amount of foreign exchange allowed to be taken out of the country for vacation or business purposes. These limits, also called the Exchange Control Rules and Regulations are stipulated and managed by the South African Reserve Bank.

Edited July 2, 2013 by Heymanse

[BonnieBecker]

@Heymanse. I think I will be doing it that way. Will chat to my personal banker about assisting with the process. Did you then also have to apply for the tax clearance certificate? With tax season upon us and approximately 2000 people going through SARS in East London everyday for the next while and us leaving in 20 days, I am afraid I have run out of time to do this. I contacted Cashkows and although they were very helpful, I cannot afford to pay them R18000 for assistance in getting an RA that is only 3 years old! My husband and I are 27 and 26 respectively and although we have saved for three years, we do not go over with money from selling a house etc like many others do. What we have is everything that we have worked hard and saved for and I am still stressing that we going to be beggars in Australia (although he tells me that I am melodramatic) . Anyway at the end of the day I would really like to get my money out of SA.

Thanks again to everyone for all the advice! Really appreciate it