[South Africa] Warning about new expat tax changes

[South Africa] Warning about new expat tax changes
19 Jan 2021

South Africans living or working abroad can no longer avoid the reach of the South African Revenue Service (SARS). Under pressure to meet its revenue quotas, SARS has begun auditing the country’s non-compliant expatriates in earnest.

It is now time for expats to face up to and deal with the situation, according to Jonty Leon, legal manager at Tax Consulting SA.

“We have been warning expatriates that this was coming and now that it’s here, the time for hiding one’s head in the sand is over,” he said.

Mr Leon reportedly advises people intending to relocate to another country to follow the formal exit procedures and, crucially, ensure their tax affairs are in order before making the move.

Following the formal financial emigration process is the safest route to remove ambiguity on tax residency status. This process is changing with a new more stringent regime being implemented from March 1, 2021.

Such news may come as a shock to those under the impression that they are free from any further tax obligation to South Africa once they set foot on foreign soil. It will be a greater shock still for people who left the country without settling their tax debt; the obligation remains even if they left decades ago.

“With stricter legislation to back its efforts and an emerging system of global financial data sharing as wind in its sails, SARS is more than capable of detecting taxpayers who historically flew under its radar,” Mr Leon said.

Business Tech reports on the change and details the options still remaining for expats and those hoping to emigrate. (Quotes via original reporting)

South Africans living or working abroad can no longer avoid the reach of the South African Revenue Service (SARS). Under pressure to meet its revenue quotas, SARS has begun auditing the country’s non-compliant expatriates in earnest.

It is now time for expats to face up to and deal with the situation, according to Jonty Leon, legal manager at Tax Consulting SA.

“We have been warning expatriates that this was coming and now that it’s here, the time for hiding one’s head in the sand is over,” he said.

Mr Leon reportedly advises people intending to relocate to another country to follow the formal exit procedures and, crucially, ensure their tax affairs are in order before making the move.

Following the formal financial emigration process is the safest route to remove ambiguity on tax residency status. This process is changing with a new more stringent regime being implemented from March 1, 2021.

Such news may come as a shock to those under the impression that they are free from any further tax obligation to South Africa once they set foot on foreign soil. It will be a greater shock still for people who left the country without settling their tax debt; the obligation remains even if they left decades ago.

“With stricter legislation to back its efforts and an emerging system of global financial data sharing as wind in its sails, SARS is more than capable of detecting taxpayers who historically flew under its radar,” Mr Leon said.

Business Tech reports on the change and details the options still remaining for expats and those hoping to emigrate. (Quotes via original reporting)

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