Cessation of Tax Residency

This FAQ article is based on tax law for the year ending 29 February 2024.

1. The Problem

How can a taxpayer, who is currently an ordinary resident in South Africa, navigate the process of ceasing to be a tax resident in South Africa through emigration after taking a job opportunity in the UAE six months ago, all while owning property in South Africa and a single transportation business asset?

2. The Answer

It should be noted that UAE does not allow for passport-based emigration i.e. once the UAE employment is lost, the taxpayer needs to leave the UAE, unless they hold a golden visa (property owner, or highly qualified individual). It follows that unless there is a second passport from another country, breaking ordinarily resident status will not be possible. Several factors will be considered to determine whether a taxpayer has ceased to be a tax resident of South Africa, such as the type of visa used to travel to a foreign country, a certificate of tax residence issued by the Federal Tax Authority in the UAE and applying the tie-breaker test. Having rented out his SA house the only available family home is the UAE property, and the first tie-breaker test then favours the UAE.

Do not forget about our AI session with Mark Silberman on the 8th where he will discuss how it affects tax departments.

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