South Africans living overseas have been warned that they may still need to submit tax returns to the South African Revenue Service (SARS)
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South Africans living overseas have been warned that they may still need to submit tax returns to the South African Revenue Service (SARS), even if they have lived abroad for many years.
The warning comes from John-Paul Fraser, Team Lead: Cross-Border Taxation, and Vivian Cox, Expatriate Tax Consultant at Tax Consulting South Africa.
"Many expatriates assume that relocating overseas automatically removes them from the South African tax system, but this is often not the case.
Whether an expatriate is required, under Section 25 of the Tax Administration Act, 2011 (Act No. 28 of 2011), to submit a return depends on a range of factors.
"These include their tax residency status, the nature and source of their income, and whether they continue to hold financial interests in South Africa".
They stressed that as "SARS continues to strengthen its compliance capabilities and increase visibility over offshore structures and international income, expatriates should take the opportunity to review their filing obligations and ensure they understand whether they are required to submit a return".
"Physical relocation abroad does not, in itself, bring an end to a taxpayer’s relationship with SARS. The key consideration is whether the individual has formally ceased South African tax residency.
"Where this has not occurred, SARS may still regard the person as a South African tax resident, which can result in ongoing reporting obligations on worldwide income and assets".
According to Tax Consulting South Africa, for expatriates who are still recognised as South African tax residents by SARS, the following may be relevant for tax compliance:
The organisation said that foreign income and offshore assets remain important considerations for taxpayers who have not ceased South African tax residency.
It added that South Africans abroad should not assume that income thresholds or SARS auto-assessments automatically remove the need to file a return.
"While SARS may issue these assessments where sufficient third-party data is available, offshore income and international assets are not always fully captured in its records".
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