As I reported at the time, South Africa changed its rules and regulations on tax residence on 1 March 2021. Essentially, the country switched from a source-based to a residence-based tax system for individuals. From this date, South African tax residents will pay tax on their worldwide income (subject to some exclusions) and non-residents are subject to tax on income originating in South Africa. The tax status is determined by circumstances and choice but must be confirmed by the South African Revenue Service (SARS).
Knowing and understanding the implications of your tax residency status is absolutely essential for your financial planning. Being informed can result in significant advantages, but mistakes can also be very costly for those who get it wrong.
SARS have dealt with this matter comprehensively on their website and I recommend that all South Africans living overseas take a look to see if they qualify as a non-resident.
For expatriates, obtaining non-resident tax status confers significant advantages, including the opportunity to set up international tax-efficient pensions (as endorsed by Judge Davis) and the right to withdraw and reinvest SA based pension schemes. Currently, I am helping many South Africans with these issues and am very familiar with the processes and pitfalls.
Michele & Holborn Assets are licensed & Regulated to give advice in South Africa & the UAE.
Michele is highly experienced in working with South African clients. If you are seeking assistance with your financial planning, savings and investments please contact Michele directly at [email protected] or call direct on +971 50 618 6463.