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Mar 2, 2021
Financial emigration is the process used by many South Africans abroad to formalise their non-resident status for both tax and exchange control purposes, and which is set to be amended, as mentioned a year ago in Budget 2020, and came into effect on 1 March 2021.
By Jonty Leon, legal manager: expatriate tax at Tax Consulting South Africa
Since the initial announcement, there has been zero public consultation, draft Regulations or anything else publicly released, on exactly what the new process will look like. However, finally the South African Reserve Bank (SARB) has released its comments to authorised dealers on how the new regime will commence.
South Africa’s financial emigration system has changed – here are the new rules
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In its 2021 national budget, Treasury said that amended rules around financial emigration are set to come into effect from 1 March 2021.
Financial emigration is the process used by many South Africans abroad to formalise their non-resident status for both tax and exchange control purposes.
“Since the initial announcement, there has been zero public consultation, draft Regulations or anything else publicly released on exactly what the new process will look like,” says Jonty Leon, legal manager at Tax Consulting South Africa.
“However, finally the South African Reserve Bank (SARB) has released its comments to authorised dealers on how the new regime will commence.”
The New Financial Emigration Announced by SARB
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Financial emigration is the process used by many South Africans abroad to formalise their non-resident status for both tax and exchange control purposes, and which is set to be amended, as mentioned a year ago in Budget 2020, and come into effect on 1 March 2021.
Warning over new expat tax changes for South Africa
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South Africans living or working abroad can no longer avoid the long arm of the South African Revenue Service (SARS), says Jonty Leon, legal manager at Tax Consulting SA.
Under pressure to meet its revenue quotas, Leon said that the tax authority has started auditing the country’s non-compliant expatriates in earnest.
“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.
He advises those intending to relocate to another country to follow the formal exit procedures and, most importantly, ensure their tax affairs are in order beforehand.