Before considering Financial immigration or ceasing your tax residency in South Africa, make sure that you actually 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. 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).
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.
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
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