Practical Guidance - Emigration and Tax
Presenters : Hugo van Zyl , Mathys Briers-Louw
Overview
The concept of formal emigration or exchange control emigration, as recognized by the Financial Surveillance Department (Excon), is phased out as of 1 March 2021. This change impacts the early encashment of retirement annuities by non-residents. Practitioners are noticing a significant gap between Excon non-resident status and the tax concept of non-residency. SARS records a cessation of tax residency on the date the taxpayer leaves SA, disregarding the principles of being ordinarily resident and/or treaty tiebreakers. It can be argued that both SARB and SARS are acting outside their respective acts in ensuring compliance for residents and emigrants. Tax practitioners can ensure legally compliant workaround options and roadmaps by thoroughly understanding both SARB and SARS regulations, keeping abreast of legislative changes, and providing clients with strategic advice that aligns with current laws. Collaboration with legal experts in tax law and international tax treaties also helps create robust compliance strategies.
Video Content
- Residents - the gap between Excon and Income Tax Act definitions
- The SARS process for obtaining a letter confirming tax emigrant status.
- Financial Emigration was deemed a waste of time and money - everyone must now follow the SARS process.
- The role of the authorized dealer
- Their increasing demands, considering tax acts, banking acts, and AML (anti-money laundering) questions, especially now that we are on grey lists.
- Early encashment of retirement annuities by emigrants.
- AIT process - understanding the difference and significance between resident and non-resident applications.
- Distributions from a SA trust to be paid to a foreigner.
Competencies developed in this video
After attending this video, participants are able to:
- Understand resident vs. non-resident status (Tax).
- Ensure compliance post-emigration (Tax).
- Conduct pre-emigration planning (Exchange Control).
- Differentiate applications by residents vs. non-residents (Exchange Control)
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