What is Financial Emigration
You may recently have read our article about a new South African tax law affecting South Africans living abroad. According to it, any South African living and working abroad for an extended amount of time, is liable to pay tax on their foreign income, to SARS. In addition to this, South Africa has a standing double taxation agreement with many other countries, meaning that immigrants in these places will pay a percentage of their income not only to SARS, but also to the country in question.
This, understandably, brings about a number of concerns to South Africans living and working abroad, and if you have found yourself begrudgingly in this bracket of earners, there are a few things you can do. You can either tie your money up in elaborate investment funds that offer tax benefits, or you can file for financial emigration with SARS and the South African Reserve Bank. But what does this mean?
Financial Emigration in a Nutshell
Financial emigration involves informing SARS and the South African Federal Reserve Bank that you no longer pay tax to the South African government. When informing them of it, you should know that there will be some degree of investigation involved in their part, and so it needs to be done thoroughly and properly. Bare in minds, however, that you need to have no financial assets in South Africa, and should have been working and living abroad for a period in excess of 5 years.
The process is as follows:
- Complete an MP336 form
- Obtain an emigration tax clearance certificate from SARS.
- Submit your application to the SARB.
- Once financial emigration is confirmed, you will need to pay a once-off capital gains tax on certain assets, both locally and abroad.
Contact PM Immigration for Assistance
The procedure isn’t always as clear cut as this, and is largely dependent on your unique situation. For assistance with all things related to immigration, be sure to contact a representative from PM Immigration today, or visit our website for details on our services.