I never said I wasn't physically emigrating. Just that this thread is not about emigration in general, I've got that covered. Just interested to know if anybody else on this forum have gone through the process of financial emigration and whether they did it themselves of with the aid of a company / consultant
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Financial emigration
- Thread starter vic777
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I never said I wasn't physically emigrating. Just that this thread is not about emigration in general, I've got that covered. Just interested to know if anybody else on this forum have gone through the process of financial emigration and whether they did it themselves of with the aid of a company / consultant
^^vampire^^
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The best thing to do is get a consultant that deals with this as they have the relationships to get it done. Most people who try to do it themselves hit a brick wall.
You can submit zero returns, as long as the country you move to has a double taxation treaty with SA. You are supposed to submit the money you earn while overseas and mark it as a double taxation credit but I don't as I don't trust SARS not to **** me around.
To financially emigrate you must have no financial ties to the country anymore. No job, no house, no bank account etc.
You then get a blocked account set up that any money from RAs etc can be paid into. You then need to request deregistration as a tax payer from SARS, get your RAs paid out and then move the cash overseas. Because your RA cash was earned in SA it will be taxed here when paid out. You can then use a forex company (Kaskcows, forex capital etc) to send money overseas. To send cash to Aus I pay R250m service fee and 1% spread (about 10c-11c above exchange rate because AUD ~ R11).
You can submit zero returns, as long as the country you move to has a double taxation treaty with SA. You are supposed to submit the money you earn while overseas and mark it as a double taxation credit but I don't as I don't trust SARS not to **** me around.
To financially emigrate you must have no financial ties to the country anymore. No job, no house, no bank account etc.
You then get a blocked account set up that any money from RAs etc can be paid into. You then need to request deregistration as a tax payer from SARS, get your RAs paid out and then move the cash overseas. Because your RA cash was earned in SA it will be taxed here when paid out. You can then use a forex company (Kaskcows, forex capital etc) to send money overseas. To send cash to Aus I pay R250m service fee and 1% spread (about 10c-11c above exchange rate because AUD ~ R11).
HavocXphere
Honorary Master
Unless you've got an RA that you want to crack open or >10m there is really little reason to bother with the paperwork.
Thanks so much for your detailed reply.
I need to work out if it is worth it to financially emigrate or just leave my RA money here (other than some savings, which I need to take over, I just have RA / preservation funds, no investment property, etc).
Can you recommend any consultants?
I just have RA's / preservation funds - nothing else.
Hamster
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Correct me if I'm wrong, but if you do not financially emigrate you're still a taxable citizen of the country? So that will require you file a tax return etc every year?
That is how I understand it as well
^^vampire^^
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Just as an aside to this, I would imagine in the future years the ANC will get desperate and change the laws to state your overseas income is also taxable in SA or some other type of nonsense. If this did happen and you were still a tax resident they may have grounds to arrest you if you went back.
I personally don't see myself going to SA every again but I have a property and RAs which I need to cash in so I'm going to be going through the process next year. I would also worry that the longer you wait the less your money will be worth when taking it across to your new home so if you don't intend on returning to SA take your money out.
Some people that I have spoken used kashcows but as I haven't done the process personally yet I cannot vouch for their services.
HavocXphere
Honorary Master
No.
ZA tax laws - while convoluted (some of the rules have back-dating type effects) - are quite clear on who gets taxed.
This "official emigration" stuff discussed here features only tangentially there. It's one of triggers that can break your tax residency but only one of many. And those others get triggered by simply leaving. Like 1 of the 50 people I know that left actually did that.
That's why I'm saying you only really need it if you need to crack open an RA or go above the fx exchange limit of 10/11m.
Basically if you do a "proper" emigration with the whole kiss grandma goodbye I'm going to Perth then you're home free in terms of taxation. If you're working on an oil rig for a couple months...that's where it gets tricky.
The grandma scenario has a bit of a twilight effect going though where you end up in scenarios where technically you need to declare cash, pay tax and then get it back. See backdating above. A lot of people just say fk it...don't declare in those scenarios. It's a bit shady in that's it's breaking the law, but amounts to giving SARS R100 and then 3 months later asking SARS for a R100 refund...so to each their own. See vamp's post
Also...no idea wtf people are on about with "financial emigration" in this thread. There is no such thing. There is the whole blocked account thing - which goes hand in hand with an impending actual physical emigration and then there is moving assets offshore. That's it.
Not happening. Firstly zero chance of enforcement so it's futile, second bad PR, third the crowd they'd p.iss of is connected. Remember all those FDI inflows that literally keep the SA finances alive...that foreign money comes with an implicit understanding that senior staff is globally mobile. You tell those guys they'll be personally taxed suddenly & unexpectedly and there will be a riot. (Source - been there done that).
Hamster
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Err.... that's what the banks and tax consultants call it.
https://www.bidvestbank.co.za/perso...ernational-payments/financial-emigration.aspx
http://www.taxconsulting.co.za/financial-emigration/
http://mayaonmoney.co.za/2015/09/the-ins-and-outs-of-financial-emigration/
That last link speaks of the RA's similar to what you mentioned.
That is what it is called
https://businesstech.co.za/news/fin...-for-financial-emigration-heres-how-it-works/
"... financial emigration is a compliant step from a tax perspective and a formal process with the South African Reserve Bank (SARB) to change your tax status from “resident” to “non-resident” for exchange control purposes."
Also, unless you do this you still have to submit tax returns (even if it is a zero tax return) in SA even if you work overseas.
Somebody I know working at SARS told me they get feeds from foreign countries with regards to bank accounts opened by South Africans in foreign countries. It might be hard but they could try and enforce it
HavocXphere
Honorary Master
Right so what I call getting a restricted account the consultants you linked call "financial immigration" and companies line up to charge people money for this. Got it.
Clever branding calling it financial emigration.
Yeah that's a super dodge quote.
Tax residence = SARS
Exchange control = SARB
Close enough I guess. Maybe SARB applies identical criteria to SARS??? Not aware of SARB having a concept equivalent to SARS' tax residency tests but who knows.
If you are actually doing this I'd recommend reading the laws in question.
Nope. I'm not a tax resident...why would I submit a tax return?? Legally no ZA taxable income, not a ZA tax resident...why would I? Point me to a law that says I need to & I'll do so - I try to be legit...
Fk it...yeah maybe what you need is a 1k per hour emigration consultant.
reactor_sa
Executive Member
Unless you are taking more than R5m out the country, I wouldn't bother. I like the idea of having a ZA bank account while I change over.
I work with movement of funds offshore be it for emigration or investment purposes, you can PM to discuss the details, but what was said earlier about physically being present in the country is not true.
HavocXphere, the official term is financial emigration and only going through the process and obtaining a reference number results in a bank opening a blocked account for you. Also for those saying not to bother, if you have any payouts due like annuities etc. they can only be paid out to emigrant blocked out and as mentioned earlier opening it from overseas is possible, just more lengthy process.
PS There are no fees for advise, but there are SARB charges for the application.
HavocXphere, the official term is financial emigration and only going through the process and obtaining a reference number results in a bank opening a blocked account for you. Also for those saying not to bother, if you have any payouts due like annuities etc. they can only be paid out to emigrant blocked out and as mentioned earlier opening it from overseas is possible, just more lengthy process.
PS There are no fees for advise, but there are SARB charges for the application.
I am reading up on this, I am not saying I, or any other person, needs to go an see an expensive consultant, so chill.
With regards to you having to submit tax returns, my understanding is if you have South African bank accounts and you were registered for tax in South Africa you need to continue to submit tax returns, even if they are zero tax returns
As do I. My concern is mainly my RA's on this side, with the Rand taking a dive
Is the concerns here also the expat tax that is expected in 2020?
This only applies if you paying low or no tax e.g. the middle east. For most people in the UK, AUS and most of EU this shouldn't be a huge problem as the tax rates are either the same or higher than SA, also the first 1 million is exempt so you have to be earning over a million in a country that the tax bracket for over a million is less than 41%. So for example if the tax in that country is 40% for money earned over a million and under 1.5 you would owe SARS 1%, anything over 1.5 then its the difference of 45%. If you in the no tax countries like UAE then you pay the full 41% for every rand over a million and 45% for everything over 1.5.
Financial immigration sounds great but doesn't make sense if you are not 100% leaving for good as the costs off selling up and cashing out is really high...
This only applies if you paying low or no tax e.g. the middle east. For most people in the UK, AUS and most of EU this shouldn't be a huge problem as the tax rates are either the same or higher than SA, also the first 1 million is exempt so you have to be earning over a million in a country that the tax bracket for over a million is less than 41%. So for example if the tax in that country is 40% for money earned over a million and under 1.5 you would owe SARS 1%, anything over 1.5 then its the difference of 45%. If you in the no tax countries like UAE then you pay the full 41% for every rand over a million and 45% for everything over 1.5.
Financial immigration sounds great but doesn't make sense if you are not 100% leaving for good as the costs off selling up and cashing out is really high...
