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IN PROGRESS - SOME SECTIONS ARE INCOMPLETE
When we arrived in NL we already knew that we did not want to return to SA and we decided to start the Financial / Tax Emigration process immediately. When we started doing the investigation, the process with Sars had just changed and they were no longer calling it financial emigration but rather tax emigration. We knew that SARS has also changed the legislation from 1 March 2020 which means they now tax you on your foreign income over a specific amount (in 2020 it was R1 250 000 per annum) and you would need to pay tax on the amount you earn over that value.
Your tax status is also separate from your residency status, so even if you cease your SA citizenship, but not your tax status, then you still have to submit returns even though you are not a citizen. That is why it is important to do this process if you are not planning on returning to SA to work again.
The difference between financial emigration and tax emigration is that with tax emigration, you don't get access to your retirement funds immediately. Unfortunately SARS changed the process as of 1 March 2021 and you can no longer do financial emigration but only tax emigration. Once you have been out of the country for 3 full years and you have done your tax emigration, you can then access your retirement funds to bring the money over to NL. Here is a article that explains this in more detail.
If you get to a point where you close all of your bank accounts, have no more RA's or investments and no assets, you are only then able to de-register with SARS and no longer complete tax returns. If you still have bank accounts or RA's or assets, you have to continue submitting your tax returns however you don't have to state your foreign income on it.
Our process was relately simple because we did not have a complex financial situation, we had already sold our house and all our assets and the only assets we had left in South Africa were our RA's.
We decided to use a company to do our tax emigration as I wasn't fully aware of how to do the process and I didn't want to mess anything up by filling out the paperwork incorrectly. We used Tax Consulting Services and I found their service very good, they communicated very clearly and I felt that everything went smoothly with the process. They also came to NL and did a session about the tax emigration process and it was nice to attend and meet the people behind the calls and emails.
During our process there was another change that SARS implemented and we had to do some additional steps but I will explain all the steps in the sections below.
There were a lot of documents and information required for this process which I will list in this section. The first step was for Tax Consulting to determine how complex our situation was, they had sent us a questionaire which we had to complete.
Country of residence
Country of employment
Average annual salary in Rands using the existing exchange rate
Name of current employer
Job title and description
Current Retirement Annuity contributions (in South Africa)
Permanent home, whether in SA or NL, disclose full details of both.
Immediate family - where do they reside, provide a description
Economic relations - where do you earn your income
Habitual adobe - where do you return to daily
Current nationalities
SA Passport or ID book
Tax - where do you pay tax abroad and what rate
Tax residency document
List all assets, in SA and abroad
Residence in SA - is it rented out - provide details of dates and rental income received
Intentions for the future - do you plan on returning to SA and why
Single or married - spouse full details and nationality
Date of departure from SA
Plans for departure - did you sell assets and prepare for your move before your departure
Non tax resident start date
Returning to SA - how many times a year and for how long
Other reasons you would consider yourself a non tax resident
Once Tax Consulting went through all of my answers they confirmed that I would qualify for the tax emigration and the first step they had to do was confirm my tax compliance with SARS. The cost to do this was R1800 each.
The rest of the process is documented in the sections below.
The first step is for your tax compliance to be verified, I had to complete a few forms for this as well as transfering my tax types to Tax Consulting in efiling.
They will go through your previous tax returns to confirm if they are all correct or if any amendments need to be done, no amendments needed to be done on our tax returns. Once this was done we could continue with our actual financial emigration process.
This is the information I had to submit in order for my tax compliance to be confirmed:
Full names
Tax reference number
ID number / Passport number
Banking details
Residential address
Postal address
Current address abroad
Current contact number abroad
Country of residence
Married and how - COP, Prenup etc
Spouse country of residence
Details of children - do you support them financial, where do they reside
SA Citizenship
Intention to reside outside of SA permanently
Employment contract or self employed
Date of departure from SA
Date you started working abroad
Number of days you spend in SA annually
List assets in South Africa
Shares, Trusts, Policies, Property, Medical Aid, If other - explain
List assets outside of South Africa
Shares, Trusts, Policies, Property, Medical Aid, If other - explain
List income derived from investments
Dividends, Rental, Capital Gains, if other - explain
Part of a trust, trustee, beneficiary - provide details
In or outside of South Africa
Part of a company - owner, director - provide details
In or outside of South Africa
List all bank accounts in SA
Foreign transfers in or out of SA
How regular
Purpose of transfers
Details of retirement in SA
Last update of will
Expecting inheritance from SA Source in future
Earn income outside of SA
More than R1.25m limit (2021 amount)
Earn income from SA source
Amount of income in SA
Tax on income earned abroad - details and tax rate
Once our tax status was confirmed as compliant, they were able to continue with the financial emigration process which is detailed below.
For the actual financial emigration process, we had to complete more forms and submit documents as proof that Tax Consulting submitted to SARS.
Assets and liabilities in SA (Form)
Statements per asset and liability
Property details and evaluation
Municipal statement
Mortgage statement
Vehicle or boat registration papers and evaluation
Statements
SARS IT21(a) Form
Lease agreement for SA properties rented out
SARS 3 years assets and liabilities sheet
Must match all amounts in other documents or statements
Only need statements for the most recent year, not the other 2
SARS Cease to be tax resident declaration (form)
Copy of ID or passport
Copy of passport with exit / entry stamps
Copy of resident permit / letter of citizenship from resident country / visa
Foreign proof of address
Foreign tax residency certificate
if applying for RA after 3 years, the certificate must be for 3 years
Bank consent form
Because I used Tax Consulting services, I had to give the bank consent to provide them and SARS with statements or additional information
SARS Power of Attorney from
Because I used Tax Consulting services, I had to give them power of attorney to do the application with SARS on my behalf
These were the costs associated with the process that I paid to Tax Consulting services:
Tax Compliance Status x 2 (myself and husband) R 3 600
Financial Emigration for spousal unit (myself and husband) R25 000
This is the timeline of our process, which was a simple one due to not many assets and liabilities in SA.
Here are some useful links: