South Africa’s big expat tax is coming

Tman*

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How will this ever be enforced?

Sars: "Hi Mr Smith, how is Sydney? By the way, we are struggling to get your tax info from the Australian Tax Autority, but we think you owe SARS R100 000.

Please pay, or we will put you in Jail."

Me: I'm never returning, k thx bye.
 

Surv0

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Yeah, this is fairly disappointing and Im not sure on what level they actually follow up. Im leaving in April, and could very well make a million a year within a year of moving which means I now need to consider doing an official financial emigration which would be sad, but so be it I guess.

SARS isnt going to get a penny more from me once I leave and if that means losing citizenship then oh well.
 

gregmcc

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Not going to happen. I'll just never return to SA. Will even lose citizenship if I have to.

I thought this applied to South African residents working overseas. If you have moved overseas (permanently) you are no longer a resident so it does not apply?
 

GoB

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Once you financially emigrated there is no issue.

You could also try to siphon your money out at R1m/year/person before that, but that would cause income tax issues on the other side if not done correctly.

The situation where it will affect legitimate expats the most is where financial emigration has not taken place.
I posted my understanding of the change already... but basically it seems that from 2020, your yearly income including your foreign income will be taken into account when calculating your tax return.

So specifically for the partial last year worked in SA... previously you'd likely get a fat PAYE payback, now you'll get nothing or possibly even need to pay extra.
 

ISP cash cow

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Not going to happen. I'll just never return to SA. Will even lose citizenship if I have to.

I thought this applied to South African residents working overseas. If you have moved overseas (permanently) you are no longer a resident so it does not apply?

when you emigrate permanently, you are supposed to do a financial declaration and submission to SARS (basically saying you don't owe any tax money when you leave the country. You get a Clearance certificate when you leave claiming that all is in order with the government financially and so you are able to leave.

Most people don't do this and don't let the government know that they are leaving and so Tax forms are sent out with no returns filed.

It will be interesting to see how SARS reckon they are going to get money from overseas expatriate who are not coming back to the country.
Besides only if you bring your earnings into this country should you be taxed on it. How does SARS think they are going to get away with you earning money in a different country and paying tax and keeping it in that country?
double tax system?

and 40% nogal what they smoking?
 

Mephisto_Helix

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Well it's only affecting that handful of poephols who return so meh ..... up to 45% :ROFL:
 

gregmcc

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Guess I will need to financially emigrate at some point but if you are never returning they can't possibly get money from you. Have no intention of transferring any money back to SA.
 

krycor

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Once you financially emigrated there is no issue.

You could also try to siphon your money out at R1m/year/person before that, but that would cause income tax issues on the other side if not done correctly.

The situation where it will affect legitimate expats the most is where financial emigration has not taken place.
I posted my understanding of the change already... but basically it seems that from 2020, your yearly income including your foreign income will be taken into account when calculating your tax return.

So specifically for the partial last year worked in SA... previously you'd likely get a fat PAYE payback, now you'll get nothing or possibly even need to pay extra.

I don't think they will get much tax income from this as everyone i know who has left in the last 2 years has financially emigrated too and cashed out pension, assets etc.

I seriously think october income tax numbers gonna make them worried though as people are leaving as fast as they can.
 

Nerfherder

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I don't think they will get much tax income from this as everyone i know who has left in the last 2 years has financially emigrated too and cashed out pension, assets etc.

I seriously think october income tax numbers gonna make them worried though as people are leaving as fast as they can.
Its hard to financially emigrate as most people have pension funds and money still in SA

Remember its really hard to move large amounts of money overseas as well.

if you are in your 30's and have a pension and properties its not going to be easy.
 

ISP cash cow

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I don't think they will get much tax income from this as everyone i know who has left in the last 2 years has financially emigrated too and cashed out pension, assets etc.

I seriously think october income tax numbers gonna make them worried though as people are leaving as fast as they can.

the worry is for people who leave and still have financial obligations such as retirement annuities and such like still being paid in this country.
 

koeks525

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Why not focus on making South Africa more attractive for investment and people? I can see people choose to lose their citizenship over paying 45% tax, plus taxes in respective country
 

Surv0

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Why not focus on making South Africa more attractive for investment and people? I can see people choose to lose their citizenship over paying 45% tax, plus taxes in respective country

It seems like a cut your nose to spite your face situation. All this is going to do is force people to formally emigrate and thus basically write off the country they are leaving. Rather than leave the door open so they can return without issue, because well that would benefit the country.

What they are doing wont work and wont benefit the country. But then again, nothing the ruling party is doing benefits this country.
 

GoB

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This is true... many recent policy changes alienate citizens.

Policies like increasing CGT and foreign income tax pushes people in the wrong direction - taking the loss and getting out.

In the emigration threads, the consensus seems to be that selling all property and cashing pension funds is the best approach.
I agree with this - it's too complicated to leave anything behind.
 

Cicero

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I'm one of those who pretty much just left. I did file my tax return for the tax year I was still in SA and earning there, then never again.

Erm....this has me pondering.
 

ArtyLoop

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So as I understand it, these idiots at SARS, now reeling from Gupta state capture, now have this hare-brained idea that those who left SA, are so fabulously rich, and never bothered to financially emigrate i.e. the whole song and dance about getting a certificate, can now be assessed for tax abroad?

Wow SARS, you are scraping the real bottom of the barrel there.
 

Surv0

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I'm one of those who pretty much just left. I did file my tax return for the tax year I was still in SA and earning there, then never again.

Erm....this has me pondering.

This is what I was planning on doing but think it may just be better to formalise everything and forget the idea of dual citizenship and come to terms with the thought that i probably wont ever return to live here.
 

ArtyLoop

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This is what I was planning on doing but think it may just be better to formalise everything and forget the idea of dual citizenship and come to terms with the thought that i probably wont ever return to live here.
Yup, if and when I go, there's no turning back either.
 
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