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Finances

Some basic information

First I have to state that we are not tax consultants and by German law are not allowed to give any tax advice. Please speak to a professional tax consultant if you have any questions regarding your taxes in South Africa. 

  • The SARS tax year is named by the year in which it ends e.g. the 2024 tax year runs from 1 March 2023 to the end of February 2024
  • South Africa uses a Residence base tax system and Germany a Source base system.
  • If you are still a tax resident in South Africa you have to declare your overseas income on your tax return. Even if you did not receive any income in South Africa. See detailed info on the SARS website
  • South Africa and Germany have a double taxation treaty which means your taxes in Germany is taken into consideration. Also see  the Foreign Employment Income Exemption information on the SARS website.
  • SARS is now using a system to reduce workload. Personal Income Taxpayers who qualify will receive Auto-Assessments.  You can check via this Tool on SARS if you have auto-assessed.  If you do not agree with the auto-assessment, please act on it immediately. All info about auto assessments can be found on the SARS website

Double Taxation Treaty between South Africa and Germany

Here are some links from the SARS and Bundesfinanzministeriums(BMF) websites

Tax Residence in South Africa

Information from SARS on who is regarded as a non-resident

Who is a tax resident in South Africa – Reference SARS

An individual is a resident for tax purposes in South Africa either by way of ordinarily residence or by way of physical presence. The concept of “ordinarily residence” is not clearly defined and the determination of whether or not an individual is an ordinarily resident for tax purposes must be done on a case-by-case basis. A number of factors must be taken into account to make such a determination. Interpretation Note 3 (Issue 2): Resident: Definition in relation to a natural person – ordinarily resident sets out the list of factors that will be taken into account to determine whether an individual is ordinarily resident for tax purposes in South Africa.  

An individual can also become a tax resident by way of physical presence. For more details in this regard, refer to Interpretation Note 4 (Issue 5): Resident: Definition in relation to a natural person – physical presence test.  

An individual who is deemed to be exclusively a resident of another country for purposes of a tax treaty is excluded from the definition of “resident”. It follows that while an individual may qualify as a resident under the ordinarily resident or physical presence tests, that individual will not be regarded as a resident for South African tax purposes if that person is a resident of another country when applying for a tax treaty.

Procedure to cease tax residency with SARS

Disclaimer:We are not tax consultants, always refer to a professional Tax consultant concerning your taxes. The Term Financial immigration is not being used anymore. The new concept for tax liability in South Africa is being a tax residence or not. Before considering ceasing your tax residency in South Africa, make sure that you need to do it. South Africa and Germany have a double taxation treaty, see more on our Income Tax page.  When you are earning your salary in Germany, and you are still a tax resident in South Africa, you need to declare your foreign income to SARS

South African Inheritance

When you are a South African citizen, living outside of South Africa, there are special rules when inheriting from a South African Estate.
Important is whether you still have a SA ID document, whether you are still a Tax resident and how much the inheritance will be. Sable International shared the following article to help you understand better

Related content

Foreign Exchange- EUR to ZAR

We are not financial advisors and therefore cannot give financial advice. The information here should not be seen as financial advice in any way.Always make

Foreign Exchange- ZAR to EUR

We are not financial advisors and therefore cannot give financial advice. The information here should not be seen as financial advice in any way.Always make

Income Tax / Lohnsteuer

We receive a lot of questions about income tax declarations and where to get help, especially getting help in English.First I have to state that

Finances

The most important financial topics for daily life in Germany

Income Tax

Information about taxes and where to find assistance

Income Tax / Lohnsteuer

We receive a lot of questions about income tax declarations and where to get help, especially getting help in English.First I have to state that we are not

Pensions

How does the German state pensions work, what can you do to supplement your pension

Pension

Homepage of the Deutsche Rentenversicherung Information about the German state pension scheme can be found on their homepage for foreign languages. The German site has a lot more information. To make use of their online services, your Residence card must be activated for online use. How to apply for

Foreign Exchange- ZAR to EUR

Foreign exchange rules to buy Euros with South African Rands

Foreign Exchange- ZAR to EUR

We are not financial advisors and therefore cannot give financial advice. The information here should not be seen as financial advice in any way.Always make informed decisions and speak to a professional when you are unsure. What is exchange control? Foreign exchange controls are various

SARS

Income Tax in South Africa

SARS Income Tax

Some basic information First I have to state that we are not tax consultants and by German law are not allowed to give any tax advice. Please speak to a professional tax consultant if you have any questions regarding your taxes in South Africa.  The

SARS

Tax Residence in South Africa

Procedure to cease tax residency with SARS

Disclaimer:We are not tax consultants, always refer to a professional Tax consultant concerning your taxes. The Term Financial immigration is not being used anymore. The new concept for

Social Insurance

Health and long-term care insurance

Sozialversicherung / Social Insurance

The following Social Insurances are payable in Germany when you are a full-time employee or trainee: Krankenvesicherung / Medical Insurance Plegeversicherung / Long Term care insurance. Nursing or home care Rentenversicherung /

Financial planning

How to find a good investment planner

Investments and financial planning

We are not financial advisors, and can therefore not give any financial advice.  We can however give you some guidelines about the industry in Germany and also some tips on finding a

Foreign Exchange- EUR to ZAR

Foreign exchange rules to buy South African Rands with Euros

Foreign Exchange- EUR to ZAR

We are not financial advisors and therefore cannot give financial advice. The information here should not be seen as financial advice in any way.Always make informed decisions and speak to a professional

Service providers listed on our website

Currency Assist

Assisting clients with International Money Transfers to or from South Africa At Currency Assist, we come to work every day striving to find a solution

Chad Joubert – Wealth Advisor

DIE GUTE WAHL – THE GOOD CHOICE – Agency for Allfinanz Deutsche Vermögensberatung. We are here for you, we provide you with professional support in

We are not financial advisors, and can therefore not give any financial advice.  We can however give you some guidelines about the industry in Germany and also some tips on finding a good consultant.

Here is some basic information you need when you want to use the services of a financial or wealth advisor. 

  1. Independent vs employed
    Financial advisors can be self-employed (independent) or employed at a Financial institution
  2. The term Financial advisor is not legally defined and is it also not a protected profession. Financial advisors can also be insurance brokers.
  3. If you want to change advisors, you should check your current contract, if contractual deadlines have been agreed upon you must honour them.
  4. Some work on a fee basis, (Honorarberater) where they receive a fee for their advice, irrespective if you signed a contract with the advisor. Confirm the fees upfront with your advisor. The advantage of working on this basis is you will more likely get independent advice
  5. An advisor can also work on a commission basis (Provisionsberater), they offer their services free of charge but get commission on the contracts they sign. The disadvantage can be that the advisor will not necessarily sell you the best product but the one that earns them the most commission. It is a good idea to compare products from multiple advisors.
  6. A Consumer advocate (Verbraucherschützer) is per se on the side of the customer and they have no interest in earning anything. They will recommend financial products based on secure data on individual banks, showing you the best possible solutions. They are not allowed to broker any products. Their services are not free, and you can find one at your nearest consumer advice centre. It is a good option if you are looking for second opinions
  7. Consultation protocol (Beratungsprotokoll) – A uniform protocol was developed by the Verbraucherzentrale and offers fixed standards that can be used to make it easier for consumers to compare products and also understand the content.  It is thus more transparent. Customers must be informed in detail about the risks and opportunities that the product offers. The individual steps of the consultation and all the information provided are recorded.  The customer will be asked to sign the protocol to declare that they have been fully informed. Do not sign this document if you do not clearly understand everything regarding the protocol or contract. Never sign a blank document.
  8. Independent advice from financial advisors is to be secured on the basis of fixed rules. The consultant is therefore obliged to question the customer in detail about his financial situation. At the same time, he should determine which wishes the customer has with his investment. There is then an obligation to provide advice based on the current situation and the wishes of the customer. If certain financial products are recommended, the financial advisor must be able to justify the recommendation. 
  9. Financial advice according to the DIN standard is being planned by the legislator. Such a procedure would give financial advice a standardized framework. Consumers could rely on a fixed procedure of the respective advisor. With the help of the standard, the risk could be minimized that consumers could get advice from dubious financial advisors or were simply wrongly advised.
  10. Automated advice (Robo-Advisor) These are automated alternatives to traditional financial advice. The application determines the risk profile and creates a corresponding portfolio. The performance is monitored and the portfolio is adjusted when needed

Tips

  • It is important to ask about or research the person’s training and professional experience. 
  • It is good if they have an IHK Certificate as a “Fachwirt für Finanzplanung” 
  • It can count in your favour if the person is independent and not working purely as an intermediary for a specific bank or insurance company
  • Always remember that although a financial adviser is looking at your best interests, they will always act in their own financial interest first
  • Do not trust blindly and do your own due-diligence
  • Nothing is free in the financial industry 
  • Never sign blank documents or documents with open fields
  • An advisor should never push you to sign a document, but give you enough time to think about it before signing the contract. The advisor should also tell you that you can get a second opinion for example at the Consumer advice centre (Vebraucherzentrale)
  • An advisor should inform you about the risks involved
  • You should receive written confirmation of the most important facts
  • Your advisors should inform you how you can appeal or raise objections (Widerspruchsmöglichkeiten)

Terminology

German TermEnglish TermDescription
AusschließlichkeitsvermittlerExclusive AdvisorThe offer a limited product portfolio as they are connected to an insurance company and can therefore offer you the products of the respective company in its financial advice. He works on a commission basis and is obliged to the insurance company. It is therefore a bound financial advice and not an independent one.
MehrfachagentNon-exclusive AdvisorLike the exclusive agent, the multiple agent is dependent on insurance companies. It is advantageous for financial advice that he can draw on the products of several insurance companies and can therefore guarantee a certain degree of comparability. He also works commission-based.
VersicherungsmaklerInsurance brokerIn contrast to the exclusive broker and the multiple agent, the broker owes the customer “Best Advice”. He is therefore obliged to provide the customer with the best possible value for money on the regular market. He is also obliged to act independently of the insurance company and to keep an eye on all relevant providers. However, the broker also works on the basis of commissions.
HonorarberaterHonorary AdvisorSo-called honorary consultants are still relatively unknown in Germany in the context of financial consulting. These are often called insurance advisors. They advise customers on the basis of a predetermined fee and are therefore independent of insurance companies and financial institutions. Like an insurance broker, the fee-based consultant is committed to the customer and owes financial advice, taking into account the best possible individual situation.
ProvisionsberaterAdvisor working on commissionthey offer their services free of charge but get a commission on the contracts they sign

Where to find more information

Financial Advisors on our Website

Chad Joubert – Wealth Advisor

DIE GUTE WAHL – THE GOOD CHOICE – Agency for Allfinanz Deutsche Vermögensberatung. We are here for you, we provide you with professional support in your planning for the future: With the right concept, you

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Income Tax / Lohnsteuer

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Pension

Homepage of the Deutsche Rentenversicherung Information about the German state pension scheme can be found on their homepage for foreign languages. The German site has a lot more information.

Medical

Health insurance is mandatory for everyone visiting or living in Germany.When living in Germany you can either take our private (privaten Kran­ken­ver­si­che­rung – PKV) or

Disclaimer:
We are not tax consultants, always refer to a professional Tax consultant concerning your taxes.

The Term Financial immigration is not being used anymore. The new concept for tax liability in South Africa is being a tax residence or not.
Before considering ceasing your tax residency in South Africa, make sure that you need to do it. South Africa and Germany have a double taxation treaty, see more on our Income Tax page. 

When you are earning your salary in Germany, and you are still a tax resident in South Africa, you need to declare your foreign income to SARS by submitting an annual Tax return to SARS. If you earn less than R1.25 million per year, you do not pay any taxes on this foreign income in South Africa. If you earn above that, the taxes you already paid in Germany are taken into account when calculating the taxes due on the amount above R1.25 million. Detailed info on Foreign Employment Income Exemption from SARS

Before making financial decisions, speak to a professional to get expert advice about your specific situation.

  • Initially the taxpayer could inform SARS of its decision to cease residency through the following two channels:
  • By capturing the date on the ITR12 tax return (which from 2017 requests one to check the box as to residence status) and a letter will be sent to the taxpayer requesting them to submit supporting documentation corroborating their claims. However, SARS has recently indicated that this information will be prepopulated on the ITR12 and cannot be amended.
  •  Via the Registration, Amendments and Verification Form (RAV01) which can be found on e-Filing. The date on which they ceased to be resident must be captured under the “Income Tax Liability Details” section. A non-resident declaration form must be completed and submitted with the relevant supporting documents on e-Filing. The taxpayer should also inform SARS by capturing the applicable date on their next ITR12 tax return (if applicable).

New Changes 

A taxpayer should therefore now capture the emigration by amending the RAV01 particulars which should then, once reviewed by SARS, follow through to the ITR12.

Taxpayers ceasing tax residency in terms of the physical presence test need to only supply the standard documents listed below.

 Taxpayers ceasing residency as a result of the application of a Double Taxation Agreement will need the standard documents and a certificate of tax residency from the relevant Foreign Revenue Authority, or if they do not produce such certificates, a letter from the Foreign Revenue Authority stating that they are tax resident in that country.

 Taxpayers ceasing residency in terms of the ordinarily residence test will need to supply a motivational letter and further specific supporting documents listed below.

 Supporting documentation

The onus is on the taxpayer to prove that s/he is not subject to tax in South Africa, and by implication the onus is on the taxpayer to prove that s/he has become non-resident for South African tax purposes as and when declared.

Standard supporting documents include:

  • Signed non-resident declaration indicating on what basis the taxpayer qualifies to cease tax residency
  • A letter of motivation setting out the facts and circumstances in detail to support the disclosure
  • A copy of the taxpayer’s passport and travel diary.
  • Specific supporting documents and details include:
    • The type of visa applied for to go to the foreign country
    • Where the taxpayer has already taken up permanent residence, submission of proof. (For example, residential address, employment contract etc.)
    • A certificate of tax residency from the Foreign Revenue Authority or a letter from the same that indicates that the taxpayer is regarded as tax resident in that country
    • Details of any property still available in South Africa and the purpose of such property i.e., rental property, holiday house
    • Details of all business interests remaining in South Africa, including employment or investments
    • Details of immediate family members who remain in South Africa and why
    • Details of social interests for example, gym contracts, church membership, recreational clubs and the location of personal belongings
    • Details of all return visits to South Africa – nature, reason, and frequency

References

Information supplied by LSG Integrated, on 28.07.2022.  The information was correct at the time of writing, and will be updated as we become aware of changes

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Financial Emigration

Financial emigration is the process used by many South Africans abroad to formalise their non-resident status for both tax and exchange control purposes. The detail

Income Tax / Lohnsteuer

We receive a lot of questions about income tax declarations and where to get help, especially getting help in English.First I have to state that

We are not financial advisors and therefore cannot give financial advice. The information here should not be seen as financial advice in any way.
Always make informed decisions and speak to a professional when you are unsure.

What is exchange control?

Foreign exchange controls are various forms of controls imposed by a government on the purchase/sale of foreign currencies by residents or on the purchase/sale of local currency by nonresidents.

The South African Reserve Bank (SARB) uses the Currency and Exchanges Act No. 9 of 1933 and its Regulations to control Foreign exchange.
Authorised dealers ensure that their customers comply with the various regulations that control the sending and receiving of funds across South African borders.

EUR to ZAR

When you want to exchange Euros for South African Rand, you should keep the following in mind:

  • Your residence status
  • The amount of money you want to exchange. Some institutions have a limit on the amount, and some offer better rates for higher amounts
  • The purpose of the exchange
  • Requirements and regulations from SARS
  • Requirements and regulations in Germany
  • Tax implications
  • The exchange rate. There is a selling and buying rate, and it is not the same as the rate you hear on the news.  See for example FNB
  • The fees that are payable for the transaction. Some companies charge a percentage and others a flat rate per transaction.
  • The institution you want to use. Make sure it is an authorised dealer. You can find a list of Authorised dealers in South Africa in this document from the South African Reserve Bank.
  • Possible hidden fees

German Regulations

According to the German Foreign Trade and Payments Regulation (Außenwirtschaftsverordnung, AWV), incoming or outgoing payments from abroad must be reported to the Deutsche Bundesbank.
“Pursuant to section 11 of the Foreign Trade and Payments Act (Außenwirtschaftsgesetz, AWG) read in conjunction with section 67 et seq of the Foreign Trade and Payments Regulation (Außenwirtschaftsverordnung, AWV), all residents in Germany (natural and legal persons whose place of residence is in the Federal Republic of Germany) have to report payments of more than €12,500 or the equivalent in another currency which they receive
from non-residents (natural and legal persons whose place of residence is outside of the Federal Republic of Germany) or from residents for the account of non-residents (incoming payments) or make to non-residents or to residents for the account of non-residents (outgoing payments).” Find more information here

Receiving the money in South Africa

The person receiving the money in South Africa, even if you send money to yourself or your family, will need to submit a SARB (South African Reserve Bank) Reporting Mandate form.
“All cross-border transactions must be reported to the South African Reserve Bank in accordance with SARB Regulations.
Balance of Payments Reporting (BoP Reporting for short) is an electronic message system used by Authorised Dealers (i.e. Banks) to report cross-border transactions to the South African Reserve Bank (SARB).
When completing an application for a cross-border transaction, clients are required to provide the reason/s for the transaction. Use the lists provided to select the correct Inwards or Outward BoP Code/s for your transaction. Please note: a transaction may involve more than one reason.” – RMB Bank

Most institutions will request the information from the recipient electronically for example an email or online form. This information must be submitted at least once a year.
If the person receiving the money does not submit this form, the money can be sent back to the remitter.

Comparison website

  • Monito can be used to compare fees and rates, please be careful of hidden fees!!!

Some options to consider

These institutions are not endorsed by us, they are just a list of regular suggestions on our FB page

  • German Bank to South African Bank
  • Transferwise
  • WorldRemit – low fees, check your rate
  • Paypal
  • Western Union
  • Currency Partners

Terminology

TermDescription
SWITFTSociety for Worldwide Interbank Financial telecommunication.
SWIFT codeEvery Bank has a SWIFT code. Also referred to as the SWIFT code
BICBank Identifier code. The SWIFT Address is assigned to a bank in order to send automated payments quickly and accurately to the banks concerned. It uniquely identifies the name and country, (and sometimes the branch) of the bank involved. BICs are often called SWIFT Codes and can be either 8 or 11 characters long
IBANInternational Bank Account Number. An international bank account identifier used to uniquely identify the account of a customer at a financial institution
BoP CodesInternational Bank Account Number. An international bank account identifier used to uniquely identify the account of a customer at a financial institution

Businesses listed on our website

The following businesses can assist with Forex and International Money transfers.

Currency Assist

Assisting clients with International Money Transfers to or from South Africa At Currency Assist, we come to work every day striving to find a solution

Related content

Foreign Exchange- ZAR to EUR

We are not financial advisors and therefore cannot give financial advice. The information here should not be seen as financial advice in any way.Always make informed decisions and speak to a professional when you are unsure. What is exchange control? Foreign exchange controls are various forms of controls imposed by a government on the purchase/sale of foreign currencies by residents or on the purchase/sale of local currency by nonresidents. The South African Reserve Bank (SARB)

Financial Emigration

Financial emigration is the process used by many South Africans abroad to formalise their non-resident status for both tax and exchange control purposes. The detail within this post and on this page is not legal or financial advice and should not be construed as such. Please consult a professional advisor to consider the specifics of your personal situation. We accept no liability or responsibility for the correctness of the details within this post. E&OE.” The topic

Income Tax / Lohnsteuer

We receive a lot of questions about income tax declarations and where to get help, especially getting help in English.First I have to state that we are not tax consultants and by German law are not allowed to give any tax advice. You can read more about it here, the article is German but can be easily translated.Basically your immediate family can assist you with your taxes, see the article, but if there is no