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SA tax residency


Bob123

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Became a PR in 2016 and a citizen in 2021.  In Feb 2021 I officially financially emigrated and the exit tax on my 2016 world wide assets worked out that I owe SARS nothing.  However now I want to cash out my SA company pension which is ~R8 million and it seems I cannot use the SARB financial emigration document to  transfer the money internationally.  I always assumed that having financially emigrated SARS views me as a non resident

 

1. How do I apply for a non residency letter from SARS?  Do I merely change my status on the e-filing site, submit the supporting documents  and SARS mails me the non residency letter?

2. Once I have the SARS letter, can I then cash out and transfer the pension using this letter

 

I don't know why SARS makes it so complicated.  I went through the financial emigration process, not sure why I have to repeat the process again.  

 

 

   

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17 minutes ago, Bob123 said:

Became a PR in 2016 and a citizen in 2021.  In Feb 2021 I officially financially emigrated and the exit tax on my 2016 world wide assets worked out that I owe SARS nothing.  However now I want to cash out my SA company pension which is ~R8 million and it seems I cannot use the SARB financial emigration document to  transfer the money internationally.  I always assumed that having financially emigrated SARS views me as a non resident

 

1. How do I apply for a non residency letter from SARS?  Do I merely change my status on the e-filing site, submit the supporting documents  and SARS mails me the non residency letter?

2. Once I have the SARS letter, can I then cash out and transfer the pension using this letter

 

I don't know why SARS makes it so complicated.  I went through the financial emigration process, not sure why I have to repeat the process again.  

 

 

   

Good morning,  the option to encash retirement funds based on FE, terminated on 28 Feb 2022. Only on 24 April did SARS introduce the new process, now called AIT (approved international transfer). It is indeed necessary to first re-confirm your tax emigration status and in answer to 1. RAV01 - go to home, then open maintain sars details and update the word individual to foreign individual, non asylum seeker. Now click done and submit. Go back into the system middle block tax types and last dark blue line is Liability and change to non-resident. Your old FE date should pop up or capture it and click done and submit. SARS will now issue the request for supporting documnts. Submit and obtain the letter. 2. No, once you have letter go to tax status and request and AIT (replaced the both the FIA and TEC or tax emigration clearance. Headsup: ask the fund if you need to submit evidence that you have been out 3 or more tax years. Some preservation funds and ALL retirement annuity funds, do ask for this

GEN-ELEC-08-G01-Guide-to-the-Tax-Compliance-Status-functionality-on-eFiling-External-Guide.pdf

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`SARS press relase on 23 April 2023, effective 24 April 2023

 

Enhancements to the current Tax Compliance Status (TCS) system due to new opportunities and legislative changes include, but are not limited to:

  • The definition of what it means to be tax compliant, the business process and usability of the existing TCS system to drive continuous compliance, strengthen the compliance result and provide a superior customer experience.
  • The discontinuation of “Tender” as an option for Tax Compliance Status request.
  • Strengthening legislative alignment with the SARB exchange control changes as it pertains to Emigration, with the introduction of a new dynamic application called “Approval International Transfer (AIT)”, to replace the existing “Emigration” and “Foreign Investment Allowance (FIA)” application types.

The Tax Compliance Request form (TCR01) has been amended to align to the required changes.

Updated guides:

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  • 3 months later...

Thank you Hugo2 for the guides uploaded.

 

Once an AIT is submitted one invariably gets asked to submit the following supporting documentation:

  • Demonstrate source(s) of the capital to be invested
  • Statement of assets and liabilities for the previous three tax years (local & foreign)
  • Power of Attorney if TCS is submitted by person other than taxpayer

See SARS website for more detail on sources of capital.

 

The referenced URL points out that withdrawal of retirement funds shall only be allowed if the individual member has remained non-tax resident for at least three consecutive years.

 

Quote

Headsup: ask the fund if you need to submit evidence that you have been out 3 or more tax years.

 

 Is it not three consecutive years since the date of becoming non-tax resident?

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9 hours ago, JJV said:

Thank you Hugo2 for the guides uploaded.

 

Once an AIT is submitted one invariably gets asked to submit the following supporting documentation:

  • Demonstrate source(s) of the capital to be invested
  • Statement of assets and liabilities for the previous three tax years (local & foreign)
  • Power of Attorney if TCS is submitted by person other than taxpayer

See SARS website for more detail on sources of capital.

 

The referenced URL points out that withdrawal of retirement funds shall only be allowed if the individual member has remained non-tax resident for at least three consecutive years.

 

 

 Is it not three consecutive years since the date of becoming non-tax resident?

I agree it is indeed so. For new emigrants wishing to cash out indeed, but despite the way it was written. The actual application thereof does not follow exact rules for those who have been out many years, the fund asks not for the first three years following exit but the last consecutive three years. Also, SARS also asks for the last three-year balance sheet on which the fund value should show. I agree if you were out one year, resident one year and then out two years (thus non-resident for 3 ouf 4 last years) then the law does not allow for encashment

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Evidence of three year tax non-resident is most often a TRC or certificate of tax residence but it need not be the same county!

Edited by Hugo2
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Just now, Hugo2 said:

image.thumb.png.fd66c142107c0d8eaf323088eb382da4.png

As you can see even SARS webpage prefers to refer to REMAINED non-tax (sic) for at least three consecutive years, so there is two elements remained and consecutive and we see funds focus on remained and not on the consecutive as such.

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  • 2 months later...

I had an RA paid out in April 2022 (lump sum due to emigration).  Do I need to submit a SARS 2022/23 tax return for this? 

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On 10/21/2023 at 12:44 PM, Pam1975 said:

I had an RA paid out in April 2022 (lump sum due to emigration).  Do I need to submit a SARS 2022/23 tax return for this? 

 

Morning 

 

You can check this online with SARS - go to https://tools.sars.gov.za/sarsonlinequery/visualdashboard

 

I would suggest yes and then submit TRC issued by ATO and claim the tax on the lumpsum back from SARS. Not an easy process but an be done

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Thanks Hugo.

Haven’t seem that SARS tool before, very handy.

I don’t have to be submit but hubby does. 
Everything seems fine on efiling but “withholding tax on local interest” that AlexForbes states under note 8 - tax withheld and paid to SARS - isn’t reflected on tax return. Had a quick google and it seems that I have to request this amount from AlexForbes not SARS. That’s why I can’t find the tax withheld on tax return, does that seem right to you or am I reading it wrong?

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Hello 

Log onto SARS go to the top blue bar and find services, on the left blue index select past directives and select date range 2022 and it will search up to tax year 2024. Now make sure your accrual date was not the 2024 tax year (1 March 2023 and later). If so, a 2023 nil return should be filed. Why?? in 2024 when you file there is a gap and then ask for the gap to be filed. Also, the RA contributions may increase albeit a voluntarily nil return. In short an expat should never skip a year is my feeling and guidance to my tax years, because one day, be it when you retire (lump sum), inherit or die, SARS is going to apply a different risk engine test and demand the gaps to be filled. This could be 20 years from now and you can't recall what happened in 2022

 

Anyway, I hope you found the directive line on the other service search and now click and download the PDF file here you may to enter it manually but before you do that, try this:

 

  1. Open ITR12 and say yes you have an IRP5 and add numeric count 1
  2. Now save the return and go out to worksheet and before you re-open, select the refresh data option below the hyperlink to open the return. See if the IRp5 was found.
  3. If not, go to left index bar and select third party date, open and select tax year 2023 and now in the middle line use the drop-down menu and find the IT3a and IRP5 lines. Perhaps you can find it there. 
  4. If not, use the directive and add the IRP5 yourself. The IRp5 number is the PAYE number of the fund starting with a 7, then adding 2023010 at the end of the PAYE number then add the directive application number (not the directive number) at the end after the 20230100. Now the line is red. Go to the 202301 part of the number you entered, and before the two zeros, add more leading zeros one by one, do it slowly until red line is blue. Who needs an AI tool? 
  5. Now enter the IRP5 value and the source code is on the directive it is normally 3900 range say 3920. Make sure that the date range is the exact accrual date as the directive and on the bottom, right hand end the directive number. Don't forget this
  6. Now, in the middle of the screen is the taxable total, add the same value that you used for 3920
  7. Finally on the top right-hand side enter the PAYE as taken from the directive - now you can submit
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