A resident for tax purposes is a natural person who is habitually resident in South Africa or who is physically present in South Africa for a certain duration. There is no legal definition of “ordinarily resident.” South African courts have ruled that a taxpayer is habitually resident in the nation of their most fixed or settled domicile, the place to which they would naturally and astutely return from their travels, or their usual or major home.
If an individual is not ordinarily resident in South Africa, he or she is considered a South African resident if he or she is physically present in South Africa for more than 91 days in the relevant tax year and each of the preceding five tax years, and also for more than 915 days in the preceding five tax years. If a person who has become a South African resident via this physical presence test travels at least 330 days outside South Africa, the individual ceases to be a resident from the date the absence from South Africa began.
When an individual ceases to be a tax resident in South Africa, their qualifying international assets are presumed to be disposed of on the day before their departure from South Africa. Any increase in the value of the assets could result in a capital gains tax burden. Other tax return filing obligations for the year of assessment in which a natural person ceases to be a South African tax resident should be indicated.
What exactly is tax residence?
South Africa has a residence-based tax system, which implies that residents are taxed on their worldwide income, regardless of where it was earned, subject to specific exceptions. Non-residents, on the other hand, are taxed on income earned in South Africa.
Are you a tax resident of a country other than South Africa?
When you leave South Africa, you are not automatically classified as a non-tax resident. If you are a tax resident living in another country, you may be subject to taxation on foreign income that exceeds an R1.25 million threshold. You may also be subject to double taxation.
How can I become a South African tax resident?
If not ordinarily resident in South Africa, an individual is considered a South African resident if he or she is physically present in South Africa for more than 91 days in the relevant tax year and each of the five preceding tax years, as well as for more than 915 days in the preceding five tax years.
How do I end my South African tax residency?
What documentation is required?
The signed declaration form from SARS eFiling showing the basis on which you qualify.
A letter of motivation detailing the facts and circumstances supporting the revelation that one is no longer a tax resident.
