The New SARS Tax Compliance Changes in a Nutshell

We have put together this overview to bring clarity to the SARS Tax Compliance Status Process enhancements that is causing some undue concerns. These are changes in process and not in regulation, so you can let out that breath you were holding in and keep reading for the facts. 

What remains exactly the same:

A “tax resident” South African individual:

• Needs to be “Tax Compliant” before they will be able to obtain the prerequisite Foreign Tax Clearance (FTC) to utilise their annual allowances, as per SARB regulation.
• Can utilise their “Single Discretionary Allowance” and transfer R1-million abroad without a foreign tax clearance approval from SARS.
• Can then transfer further funds after obtaining foreign tax clearance approval form SARS.

A non-tax resident / individual who has ceased tax residency:

• Requires clearance for any and all funds transferred abroad.

What has changed:

• Previously there were two types of TCS pins that could be applied for depending on whether you were tax resident or not, namely an “Emigration” and a “Foreign Investment Allowance”.  Now there is only one pin referred to as an “Approval for International Transfer” (AIT). This is to bring processes in line with regulation that has been in effect for years regarding emigration and tax residency.

The changes have been made to the information requirements are as follows:

• Statement of assets and liabilities for the previous three years should be split between local and foreign. 
• Whether the applicant is a South African tax resident or not.
• Whether the applicant is a beneficiary of a local or foreign trust.
• Whether the applicant has an interest in any local or foreign entity (either directly or indirectly) of 20% or more.
• Whether the applicant has any loans held in local or foreign trusts