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 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. From SARS: South Africa has a residence-based tax system, which means residents are, subject to certain exclusions, taxed on their worldwide income, irrespective of where their income was earned. By contrast, non-residents are taxed on their income from a South African source.
Germany uses a Source-based tax system. A source-based tax system means that a country taxes income that is generated within its borders, regardless of where the taxpayer resides. In such a system, Germany primarily taxes income that arises from sources within the country. Residency and Worldwide Income: While the source-based tax system applies to non-residents, German residents are taxed on their worldwide income under a residence-based taxation principle. Residency is determined by physical presence (e.g., living in Germany for more than 183 days in a year) or having a permanent home in Germany.
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 are 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

Can double taxation occur?

The following is quoted from the SARS Website and was valid at the time of publishing- “Yes, if an individual earns employment income in excess of R1.25 million and the double tax agreement between South Africa and the foreign country, if any, does not provide a sole taxing right to one country, both countries will have a right to tax the income. The portion of the income in excess of R1.25 million may end up being double taxed.

Generally, under the provisions of the relevant double tax agreement, if an employee renders services in a foreign country exceeding 183 days, both countries enjoy the right to tax the income. The country of source enjoys the first right to tax the employment income and the country of residence, in our case South Africa, will provide double tax relief in the form of a foreign tax credit to the extent that tax was paid in both countries, subject to limitations.” – More information on the SARS Website

Relief from double tax?

Keep in mind that depending on your situation, if you are over the R1.25 million threshold, you still can claim tax credits for the taxes paid in Germany. The best thing to do is to speak to your tax consultant.

The following was quoted from the SARS website and was valid at the time of publishing. “Section 6quat is the mechanism under South Africa’s domestic law to claim relief from double tax where the amount received for services rendered outside South Africa is subject to tax in South Africa and in the foreign country. This credit may be claimed on assessment through an individual’s income tax return, provided certain requirements are met.

An employer may at his or her discretion, under paragraph 10 of the Fourth Schedule, apply for a directive from SARS to take into account the potential section 6quat credit on a monthly basis to determine the employees’ tax liability. This will have to be done through a dedicated channel at SARS that will be made available to the public.

See the information on Directives under paragraph 10 of the Fourth Schedule.

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.

Cease to be a Resident
Do I need to submit a tax return, even if I work outside of 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 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 SARS Cease to be a Resident SARS – Update on Cease to be a Resident 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 Related content

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

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 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 transferring money from Germany to South Africa, consider the following key points to ensure a smooth and cost-effective transaction: Exchange Rates Check the current exchange rates and compare rates offered by different providers to get the best deal. 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. Click on the icon for the FNB Link. Transfer Methods: Choose the method that suits your needs best. Options include bank transfers, online money transfer services (e.g., Wise, PayPal, Western Union), and specialized remittance services. Security Ensure the service you choose is secure and reputable. Look for providers with strong security measures and good customer reviews. 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. Click on icon for the Reserve Bank link Recipient Details Double-check the recipient’s details, including bank account number, branch code, and name, to avoid delays or lost funds. Hidden Costs Look out for hidden costs, such as unfavourable exchange rates or additional charges by intermediary banks. Transfer Fees Be aware of transfer fees, which can vary significantly between banks, online transfer services, and other financial institutions. Some providers may offer lower fees for higher amounts. Some companies charge a percentage and others a flat rate per transaction. Transfer Time: Understand how long the transfer will take. Some services offer faster transfers, sometimes within minutes, while others may take several days. Regulatory Compliance Be aware of any regulatory requirements in both Germany and South Africa. Some transfers may be subject to limits or require additional documentation. Your residence status. The purpose of the exchange Tax Implications: Understand any potential tax implications in both countries. Large transfers might attract scrutiny or be subject to taxes. Limitations The amount of money you want to exchange. Some institutions have a limit on the amount, and some offer better rates for higher amounts Customer Support: Choose a provider with good customer support to assist you if any issues arise during the transfer process. 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 receivefrom 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 suggestions from our FB page German Bank to South African Bank Transferwise WorldRemit – low fees, check your rate Paypal Western Union Currency Partners Terminology Term Description SWITFT Society for Worldwide Interbank Financial Telecommunication. SWIFT code Every Bank has a SWIFT code. Purpose: Identifies a specific bank in international financial transactions. It’s like the bank’s global phone number. Format: 8 or 11 characters long. Example: DEUTDEFFXXX First 4: Bank code (DEUT = Deutsche Bank) Next 2: Country code (DE = Germany) Next 2: Location code (FF) Last 3 (optional): Branch code (XXX = main branch) BIC Bank Identifier code.In the context of international bank transfers, BIC and SWIFT are essentially the same thing and are used interchangeably. The SWIFT code (Society for Worldwide Interbank Financial Telecommunication) is a system for exchanging messages between banks, and the BIC (Bank Identifier Code) is the code used within that system to identify a specific bank. People sometimes say “SWIFT code” and others say “BIC” — but they’re interchangeable. “BIC” is the technical term; “SWIFT” is the name of the system that issues it. IBAN International Bank Account Number. An international bank account identifier

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) uses the Currency and Exchanges Act No. 9 of 1933 and its Regulations to control Foreign exchange. The SARB is responsible for regulating cross-border transactions, preventing the abuse of the financial system and supporting the regulation of financial institutions.Authorised dealers ensure that their customers comply with the various regulations that control the sending and receiving of funds across South African borders. Can I exchange currency for friends and family visiting me in Germany – No you are not allowed to. Please refer to this article from FinGlobal or the South African Reserve bank. ZAR to EUR When you want to exchange South African Rand for Euros, 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 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 Tourism Please refer to the Travel Allowance section of the following document from the Reserve Bank. Additional Information can be found on the SARS website – Departure from SA pageAs a tourist, you can get foreign exchange from authorised dealers in South Africa. The current (2021) limit per year is R200 000, but this can change so please refer to the abovementioned documentation.You are also limited to R25 000 in Rand notes per person.You can use a South African credit card outside of South Africa if your bank allows it and if you keep to the above limits.You will need supporting documentation for example a flight ticket.For more info – see this page from Travelstart Residence in Germany Please refer to the “Residents temporarily abroad” section of the following document for the allowance limits.Additional Information can be found on the SARS website – Departure from SA pageYou are not allowed to use your South African Credit card in your new country of residence. Emigrating from SA to Germany Please refer to the “Private individuals who cease to be residents for tax purposes in South Africa” section of the following document. Additional Information can be found on the SARS website – Departure from SA page 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 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 South African Bank to German Bank Transferwise WorldRemit Paypal Western Union Currency Partners Terminology Term Description SWITFT Society for Worldwide Interbank Financial telecommunication. SWIFT code Every Bank has a SWIFT code. Also referred to as the SWIFT code BIC Bank 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 IBAN International Bank Account Number. An international bank account identifier used to uniquely identify the account of a customer at a financial institution BoP Codes 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 that a transaction may involve more than one reason Businesses listed on our website The following businesses can assist with Forex and International Money transfers. Related content

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 family relationship you are not allowed to assist someone. You are not allowed to help with your friend’s tax return. This also includes a partner if you are not engaged or married.See more from Steuertipps, Some of the options available to you are: Get a Tax advisor. In Germany they are called der Steuerberater Get help from a Lohnsteuerhilfeverein ( A wage tax aid association is a self-help institution run by employees for employees to provide assistance in wage tax matters and in special income tax assessment cases (Section 13 StBerG). They were created in 1964 at the instigation of the trade unions. The aim of the legislature is to ensure that employees can receive tax advice at reasonable costs regardless of their income.) To find one in your area you can search online or on this website. You can specify your language as well e.g Englisch or English Do it yourself. You might want to consider using software or apps. The tax rules in Germany are extremely complicated especially when both partners are working and you have kids.These rules also changes yearly so make sure that if you use software, it is up to date Where to get more information: Deutscher Steuerberater Verband / German Association for Tax advisers Make it in Germany Bundesministerium der Finanzen as well as this page from them Amtliches Lohnsteuer-Handbuch from the Bundesministerium der Finanzen Handbook Germany – The German Tax System Some basic information The German Tax year runs from January to December and you can submit your tax return between 1 January and 31 July the following year.Lohnsteuer and Einkommensteuer – They differ by the method of collection. Lohnsteuer is collected at source and paid directly to the Finanzamt (tax office) by the employer while the individual must pay Einkommensteuer himself.There are 6 German Income Tax Classes “Lohnsteuerklasse”. You can find the list here.South Africa uses a Residence base tax system and Germany a Source base system.To get a basic idea of your taxes you can use a Wage tax calculator from SteuerGoELSTER (Elektronische Steuererklärung) – For online tax submissions. You need to register for a free account. The application is currently only in German How and where do I register for Tax As an employee, you will receive your tax ID (Steueridentifikationsnummer), Format: 12 345 678 901, when you register at the Bürgerampt and Auländerbehorde. This is like an Identity number and you will keep it for life. Children born in Germany receive their tax ID at birth. As a freelancer or company, you must register for a tax number (Steuernummer), Format: 12/345/67890 or 3012034567890, that you use on your Invoices.This number is related to your place of residence and if you move to a new town you will need to apply for a new number. Application is done at the Finanzamt. You also apply for a VAT number (Umsatzsteuer-Id), Format: DE123456789, at the Finanzamt. How to Berlin has an excellent article about registering for tax Double Taxation Treaty between South Africa and Germany Agreement between the Federal Republic of Germany and the Republic of South Africa for the Avoidance of Double Taxation with respect to Taxes on Income and on Capital Abkommen zwischen der Bundersrepublik Deutschland un der Republik Südafrika zur Vermeidung der Doppelbesteuerung auf dem Gebiete der Steuern von Einkommen Income Tax Act, 1962 – AGREEMENT BETWEEN THE REPUBLIC OF SOUTH AFRICA AND THE FEDERALREPUBLIC OF GERMANY FOR THE AVOIDANCE OF DOUBLE TAXATION WITHRESPECT TO TAXES ON INCOME From SARS Can double taxation occur? The following is quoted from the SARS Website and was valid at the time of publishing- “Yes, if an individual earns employment income in excess of R1.25 million and the double tax agreement between South Africa and the foreign country, if any, does not provide a sole taxing right to one country, both countries will have a right to tax the income. The portion of the income in excess of R1.25 million may end up being double taxed. Generally, under the provisions of the relevant double tax agreement, if an employee renders services in a foreign country exceeding 183 days, both countries enjoy the right to tax the income. The country of source enjoys the first right to tax the employment income and the country of residence, in our case South Africa, will provide double tax relief in the form of a foreign tax credit to the extent that tax was paid in both countries, subject to limitations.” – More information on the SARS Website Relief from double tax? Keep in mind that depending on your situation, if you are over the R1.25 million threshold, you still can claim tax credits for the taxes paid in Germany. The best thing to do is to speak to your tax consultant. The following was quoted from the SARS website and was valid at the time of publishing. “Section 6quat is the mechanism under South Africa’s domestic law to claim relief from double tax where the amount received for services rendered outside South Africa is subject to tax in South Africa and in the foreign country. This credit may be claimed on assessment through an individual’s income tax return, provided certain requirements are met. An employer may at his or her discretion, under paragraph 10 of the Fourth Schedule, apply for a directive from SARS to take into account the potential section 6quat credit on a monthly basis to determine the employees’ tax liability. This will have to be done through a dedicated channel at SARS that will be made available to the public. See the information on Directives under paragraph 10 of the