A more stringent verification process and risk management test are in the pipeline, if the Budget Speech in February 2020 is anything to go by.
Current legislation allows a person who has formalised his or her emigration by using the financial emigration process, to fully withdraw their retirement funds when the process is complete.
President Cyril Ramaphosa, however, now signed the Taxation Laws Amendment Act into law, effective from 1 March 2021.
The consequence is that, from that date, certain retirement benefits will be locked in for a minimum period of three years.
President Cyril Ramaphosa has signed the 3-year retirement fund lock-in into law as part of the Taxation Laws Amendment Act and it will become effective as from 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.