By Fanus Jonck
The question of whether you have ceased to be a tax resident in South Africa is determined in the first place by your subjective decision to no longer make South Africa your real home and, therefore, to cease to be an ordinary tax resident in South Africa. Secondly, an inquiry of various factors will confirm whether your subjective decision is supported by objective factors.
The following factors will be considered during the objective determination of whether a person has ceased to be a tax resident of South Africa:
- The type of visa on which you have gone to the foreign country
- Proof of permanent residence in the foreign country (if applicable)
- A certificate of tax residence from the foreign revenue authority or a letter from the authority that indicates that you are regarded as a tax resident in that country (if available)
- Details of any property that you may still own in South Africa
- Details of any business interest (e.g. investment and employment) that you may still have in South Africa
- Details of your family (e.g. whether you still have any family members in South Africa and the reason thereof)
- Details of your social interests (e.g. gym contract, recreational clubs and societies) and location of your personal belongings
- Details of any return visits to South Africa, the frequency thereof and the reason for undertaking such visits
An individual, who is resident by virtue of the physical presence test, ceases to be a resident when that person is physically outside the Republic for a continuous period of at least 330 full days. The individual will be deemed to have ceased to be a resident from the day such person left South Africa.
An individual who has become a tax resident of another country through the application and for purposes of the application of a double tax agreement will also cease to be a resident for tax purposes in South Africa.
What are the consequences if I have ceased to be a tax resident?
A deemed disposal for capital gains tax purposes takes place at the time when you break your tax residence. You will be deemed to have disposed of your worldwide assets, excluding immovable property in South Africa.
Once you have ceased to be a tax resident in South Africa, you will no longer be taxed in South Africa on your worldwide income, but only on South African sourced income.
How do I declare to SARS that I have ceased to be a tax resident in South Africa?
You must inform SARS through one of the following channels that you ceased to be a tax resident:
- If you ceased to be a tax resident of South Africa during the current year of assessment, you can inform SARS through the wizard on the income tax return (ITR12) and provide the date you ceased to be a tax resident.
- Alternatively, you can inform SARS by submitting the Declaration of Cease to be a Tax Resident.
You are welcome to contact the tax consultant Fanus Jonck (tax@jonck.net) with your tax queries.
