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.

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.

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.

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.

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.

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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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?

IF I AM SUCCESSFUL IN THE FINANCIAL EMIGRATION PROCESS, IS THAT SUFFICIENT PROOF OF NON-RESIDENCY?

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)?

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?

IF FINANCIAL EMIGRATION IS DONE CORRECTLY, DOES IT GUARANTEE TAX EXEMPTION AND NON-RESIDENT TAX STATUS?

WILL SARS ACKNOWLEDGE THE FINANCIAL EMIGRATION CERTIFICATE AFTER 1 MARCH 2021 TO DETERMINE TAX RESIDENCY?

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TAX IMPLICATIONS OF FINANCIAL EMIGRATION

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