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INTEGRATED SERVICE SUITE
Our clients demand dealing with a tax centric firm, but one which appreciates that tax strategy must support their overall commercial or personal financial goals.
Having a multidisciplinary team allows us to offer a holistic service and tackle complex affairs with excellence and absolute compliance..
OUR HOLISTIC INTEGRATED SERVICE SUITE
We are currently the largest independent Tax Practice in South Africa.
Our practice provides Tax Planning, Dispute Resolution and Compliance services across all tax types, with deeply experienced Tax Attorneys, CA’s and Professional Accountants.
We perform CIPC and company setup services, Work Visa Services (South Africa and Africa), including International Travel Permit applications, Accounting work and sign-off, Forex as well as Employee Remuneration and NED work.
Our approach to engagements ensures we are more cost-effective than the big brand providers and we exceed quality outcomes due to our niche specialisation and unique adaptability. Let us partner up with you on this journey.
Got Questions? We've Got The Answers!
GENERAL QUESTIONS ON FINANCIAL EMIGRATION
WHAT IS FINANCIAL EMIGRATION?
Financial Emigration is the formal process to declare oneself as a non-resident for tax in South Africa. The process ensures that one has met all requirements under the Income Tax Act No.58 of 1962 to ensure that one is a non-resident in accordance with South Africa’s tax residency tests.
IS IT POSSIBLE TO APPLY A DTA DURING THE CURRENT TAX FILING SEASON AND ONLY START THE FINANCIAL EMIGRATION PROCESS AT A LATER DATE WHEN I AM SURE OF MY INTENTION?
Yes, that is possible. However, it is important to seek professional assistance to ensure correct application of a DTA.
WHAT IS THE ESTIMATED COST TO FINANCIALLY EMIGRATE?
The cost would be dependent on your circumstances and can only be accurately quoted upon evaluation thereof. We offer a free initial consultation to determine your personal circumstances and qualify you and quote you accordingly.
IS THERE STILL MERIT FOR ME TO FINANCIALLY EMIGRATE RIGHT NOW?
There is a misconception that the concept of financial emigration no longer exists. However, this is incorrect as the financial emigration process has been amended to include only a SARS process as SARB has been phased out of the process. The choice of whether to Financially Emigrate is dependent on whether you have a permanent intention to remain outside of South Africa or not. Should you have this intention, then it is highly recommended that you consider Financially Emigrating.
IS FINANCIAL EMIGRATION VALID FOR 5 YEARS?
There is a misconception that the concept of financial emigration no longer exists. However, this is incorrect as the financial emigration process has been amended to include only a SARS process as SARB has been phased out of the process. The choice of whether to Financially Emigrate is dependent on whether you have a permanent intention to remain outside of South Africa or not. Should you have this intention, then it is highly recommended that you consider Financially Emigrating.
IS IT POSSIBLE TO BE A SHAREHOLDER OF A PRIVATE SOUTH AFRICAN BUSINESS AND HOLD A BUSINESS BANK ACCOUNT IF I FINANCIALLY EMIGRATE?
There is a misconception that the concept of financial emigration no longer exists. However, this is incorrect as the financial emigration process has been amended to include only a SARS process as SARB has been phased out of the process. The choice of whether to Financially Emigrate is dependent on whether you have a permanent intention to remain outside of South Africa or not. Should you have this intention, then it is highly recommended that you consider Financially Emigrating.
IS IT POSSIBLE TO PURCHASE SHARES AND APPLY FOR PROPERTY LOANS ONCE YOU HAVE FINANCIALLY EMIGRATED?
There is a misconception that the concept of financial emigration no longer exists. However, this is incorrect as the financial emigration process has been amended to include only a SARS process as SARB has been phased out of the process. The choice of whether to Financially Emigrate is dependent on whether you have a permanent intention to remain outside of South Africa or not. Should you have this intention, then it is highly recommended that you consider Financially Emigrating.
DOES FINANCIAL EMIGRATION AFFECT YOUR ABILITY TO INVEST IN SA?
There is a misconception that the concept of financial emigration no longer exists. However, this is incorrect as the financial emigration process has been amended to include only a SARS process as SARB has been phased out of the process. The choice of whether to Financially Emigrate is dependent on whether you have a permanent intention to remain outside of South Africa or not. Should you have this intention, then it is highly recommended that you consider Financially Emigrating.
HOW ARE YOU AFFECTED AS A TAXPAYER IF YOU OWN PROPERTY IN SOUTH AFRICA OR IF YOU FINANCIALLY EMIGRATE?
There is a misconception that the concept of financial emigration no longer exists. However, this is incorrect as the financial emigration process has been amended to include only a SARS process as SARB has been phased out of the process. The choice of whether to Financially Emigrate is dependent on whether you have a permanent intention to remain outside of South Africa or not. Should you have this intention, then it is highly recommended that you consider Financially Emigrating.
PROCESS OF FINANCIAL EMIGRATION
IS IT TOO LATE TO APPLY FOR FINANCIAL EMIGRATION GIVEN THAT IT WAS TO BE PHASED OUT FROM MARCH 2021?
It is still possible to financially emigrate and cease your tax residency. However, the financial emigration process has been amended to include only a SARS process as SARB has been phased out of the process. Previously the FE process was a two-component process that consisted of a SARS and SARB process.
IS THERE A LIMIT ON THE NUMBER OF DAYS PER YEAR THAT ONE CAN BE IN SOUTH AFRICA WHEN FINANCIALLY EMIGRATING?
Once financially emigrated, you would need to ensure that you do not trigger tax residency again by way of the physical presence test when coming into South Africa. It is recommended that you seek advice regarding your tax residency status as this is determined on a case-by-case basis.
IF YOU INTEND ON RETIRING IN SOUTH AFRICA AFTER 20 YEARS OF WORKING ABROAD, IS IT CONSIDERED AS “RETURN FROM WANDERINGS”?
Yes, if your intention at this point is to return in the near or distant future, it is still considered that you have an intention to return and therefore remaining a tax resident in terms of the Ordinarily Resident Test.
HOW FAR CAN YOU BACKDATE THE FINANCIAL EMIGRATION PROCESS?
There is a misconception that the concept of financial emigration no longer exists. However, this is incorrect as the financial emigration process has been amended to include only a SARS process as SARB has been phased out of the process. The choice of whether to Financially Emigrate is dependent on whether you have a permanent intention to remain outside of South Africa or not. Should you have this intention, then it is highly recommended that you consider Financially Emigrating.
WHEN MUST THE FINANCIAL EMIGRATION PROCESS BE COMPLETED TO AVOID THE NEW EXPAT TAX LAW?
The expatriate tax law has already come into effect as of 1 March 2020. Therefore, should you have an intention to remain outside of South Africa on a permanent basis, the Financial Emigration process would need to be completed as soon as possible.
outside of South Africa or not. Should you have this intention, then it is highly recommended that you consider Financially Emigrating.
GENERAL EXPAT TAX QUESTIONS
WHAT WILL HAPPEN TO MY FOREIGN SAVINGS SHOULD I RETURN TO SOUTH AFRICA DUE TO THE CURRENT OR FUTURE ECONOMIC STATE?
Returning to South Africa does not affect you being able to have foreign savings. However, as a tax resident, any interest income earned from these savings would need to be declared to SARS.
WOULD I RECEIVE A TAX CLEARANCE CERTIFICATE IF MY DEEMED CGT DISPOSAL IS BEING CALCULATED?
Obtaining an Emigration Tax Clearance Status (“ETCS”) will not automatically be provided for upon calculating your deemed CGT or “exit charge”. Other factors would need to be considered to ensure that SARS would be able to produce the ETCS.
WHAT EXACTLY IS TAX RESIDENCE?
Tax residence determines where you regarded as a resident for tax purposes, i.e., where you should be paying taxes. In South Africa, there are two tests used to determine tax residency:
Ordinarily Resident Test: this test looks at the taxpayer’s subjective intention together with objective factors to support this subjective intention. Should you not qualify under this test, then the next test is considered.
Physical Presence Test: this test considers the average time spent physically present in South Africa within a specified period.
As tax resident you will be taxed on your worldwide income and assets which include all foreign and local income and assets.
AM I STILL ELIGIBLE FOR TAX IF I AM NOT A REGISTERED NON-RESIDENT AND I AM OUT OF SOUTH AFRICA FOR 330 CONSECUTIVE DAYS AND ONLY VISIT FOR 30 DAYS IN A TAX YEAR?
Being outside of the country for 330 consecutive days only has an effect of your tax residency status where you became a tax resident by way of the physical presence test. As such, we would first need to ascertain whether you are ordinarily resident or not and thereafter evaluate whether the 330 consecutive days in which you are outside of the country have a bearing on your tax residency status. Here again, non-tax residency must be formally declared to SARS and is not automatically applied even where you are theoretically no longer regarded a tax resident in terms of the residency tests.
DO I STILL HAVE TO PAY TAX ON RENTAL INCOME ON AN INVESTMENT PROPERTY IF I AM A NON-TAX RESIDENT?
Yes, South African sourced income will still need to be declared to SARS even where you are a non-tax resident.
DOES FOREIGN INCOME INCLUDE MONEY PAID FROM ABROAD INTO A SOUTH AFRICAN BANK ACCOUNT?
If the money being transferred into the South African bank account falls within the definition of gross income or is regarded as a special inclusion, then it would be regarded as foreign income.
WHAT HAPPENS IF I WORK IN BAHRAIN BUT I AM EMPLOYED BY A COMPANY IN DUBAI?
The location of the employer does not play a significant role in determining where your tax residency falls. However, further investigations would need to be made on your circumstances to properly advise.
IF I HAVE NOT LIVED IN SA FOR MORE THAN 15 YEARS AND DO NOT SPEND MORE THAN 30 DAYS PER ANNUM IN THE COUNTRY, HOW WILL THIS EFFECT MY TAX POSITION?
Determining your Tax Residency is dependent on two tests, the Physical Presence Test, and the Ordinarily Resident Test – thus even if you don’t spend any time in SA, you can still be considered a tax resident under the latter of the two tests, which focuses on what your intention is.
The Ordinarily Resident Test is the test used to determine your tax residency taking into consideration your intention and surrounding circumstances. Our teams can assist in ascertaining your tax residency status.
Non-tax residency must be formally declared to SARS and is not automatically applied even where you are theoretically no longer regarded a tax resident in terms of the residency tests.
IF I HAVE FIXED PROPERTY IN SOUTH AFRICA, WOULD IT BE A GOOD IDEA TO TRANSFER IT TO A COMPANY?
This would be dependent on what your intention is in doing so. We would need to further investigate your circumstances to sufficiently advise. It must be noted, however, that where a company holds an interest in a company, any income generated because of that property will be taxed at a rate of 28%. This would be beneficial in the instance where your individual taxable income is taxed at a rate higher than 28%. On the other hand, having a company hold an interest in a primary residence, for example, may result in higher CGT implications upon sale of the primary residence and the primary residence exclusion cannot be claimed by a company.
WHAT TAXES NEED TO BE PAID ON ANY RENTAL EARNINGS FROM SOUTH AFRICA?
The tax rate on rental income is not determined independently but it would be dependent on the total taxable income.
TAX IMPLICATIONS OF FRINGE BENEFITS
IS MEDICAL AID PAID IN SAUDI ARABIA CLAIMABLE AS PART OF YOUR SOUTH AFRICAN TAX RETURNS?
This depends on whether the contributions paid are to a fund registered under similar provisions of the South African Medical Schemes Act in the laws of the other country.
IS A LIVING ALLOWANCE A FRINGE BENEFIT?
Yes, therefore, to be included as part of your gross income.
MY COMPANY PAYS FOR MY ACCOMMODATION, TRAVEL, FAMILY, AND MEDICAL EXPENSES, HOW WILL THIS AFFECT ME?
These are considered fringe benefits which will be included in your gross income.
TAX IMPLICATIONS OF FINANCIAL EMIGRATION
HOW WOULD I BE TAXED IF I FINANCIALLY EMIGRATE AND MOVE MY RETIREMENT FUND ONLY AFTER THE PROCESS IS COMPLETE?
Withdrawal from a Retirement Fund upon conclusion of Financial Emigration will result in such funds being taxed in terms of the special tax tables specifically used for the calculation of tax on lump sum withdrawals. In very specific situations, a Double Tax Agreement may allow for the fund to be taxed in the foreign jurisdiction – however, this is not always beneficial.
The tax tables can be found here.
IS MY TAX RESIDENCY STATUS AFFECTED IF THE FINANCIAL EMIGRATION PROCESS IS COMPLETE, BUT I STILL HAVE AND/OR ACQUIRE INTERESTS IN SA (WHICH COMPLICATES MY ORDINARY RESIDENCY TEST)?
We would need to do a further investigation on your circumstances in order to ascertain your tax residency status. We are able to provide you with a Tax Residency Opinion that would assist in confirming your intention and whether such intention is sufficiently supported by your surrounding circumstances.
IF FINANCIAL EMIGRATION IS DONE CORRECTLY, DOES IT GUARANTEE TAX EXEMPTION AND NON-RESIDENT TAX STATUS?
Yes, where the Financial Emigration process is completed through our company, we are able to guarantee that you will be noted as a non-resident with SARS.. Non-tax residents are still taxed on South African sourced income which would need to be declared to SARS accordingly. However, foreign income is not taxable in South Africa and therefore need not be declared to SARS.
IF I AM SUCCESSFUL IN THE FINANCIAL EMIGRATION PROCESS, IS THAT SUFFICIENT PROOF OF NON-RESIDENCY?
Yes, where the Financial Emigration process is completed through our company, we are able to guarantee that you will be noted as a non-resident with SARS. As the onus is on the taxpayer to prove that they are not a tax resident, the Emigration Tax Clearance Status (“ETCS”) as well as the formal declaration of non-tax residency to SARS serve to discharge that particular onus.
I FINANCIALLY EMIGRATED IN 2019 AND IT WAS BACKDATED IN 2007, DO I PAY CAPITAL GAIN TAX IF I SELL MY PROPERTY IN SOUTH AFRICA?
Yes, you would still pay CGT on the property in South Africa upon sale thereof.
WILL SARS ACKNOWLEDGE THE FINANCIAL EMIGRATION CERTIFICATE AFTER 1 MARCH 2021 TO DETERMINE TAX RESIDENCY?
Yes, changes made to the Financial Emigration process post 1 March 2021 do not have retrospective effect and would not affect any Financial Emigration applications made before that date.
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About Us
Our experienced team helps individuals and families navigate the complex process of relocating their financial assets abroad. Our mission is to provide you with peace of mind and a smooth transition to your new financial home.
Thank you for choosing us – We look forward to serving you!
Find Us
Johannesburg
Wrigley Field, The Campus
57 Sloane Street, Bryanston
Gauteng
George
55 York Street
Dormehls Drift
George
Contact Us
Telephone:
South Africa: 011 467 0810
International: +27 11 782 5289
Contact
contact@financialemigration.co.za
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