tax services for South African expats

For individuals who live overseas and have financial interests in South Africa the issue of taxation is very important and requires careful consideration and planning. Failing to do so and take the appropriate action, where necessary, may give rise to a liability that could otherwise have been reduced or perhaps mitigated altogether.

It is also important to note that as tax systems differ from country to county, there is a chance that particular income earned in South Africa or abroad could be taxed twice. However South Africa has dual tax agreements in place with over 80 countries to prevent double taxation of income accruing to South African taxpayers from foreign sources, or of income accruing to foreign taxpayers from South African sources.

Double taxation treaties or agreements are bilateral agreements between two countries that will each make concessions as to their right to tax. In this regard we would always recommend that you consult a tax agent/ practitioner in your adopted country of residence in order to assess your specific tax position, locally.

A dual tax agreement allows that tax paid in one of two countries can be offset against tax payable in the other, thus avoiding double taxation.

Tax planning is a complex and intricate area which requires the knowledge and expertise of a professional - this is where the team at cashkows.com come to the rescue. With specialists who understand the complexities of the South African tax system specifically for non-residents, we can offer take a complicated situation and provide a simple solution. You are welcome to contact us for a free initial consultation to discuss your specific case.

For your information we provide below detail relating to the specific areas in which we can assist you:

• general tax services to South African expats
• tax clearances
• tax directives
• SARS tax refunds to South African expats
• tax consulting
• capital gains tax calculations on emigration

Services include:

• re-activation of SARS tax records
• registration of new taxpayers in South Africa
• filing of outstanding income tax returns in South Africa
• changing/ amendment of your bank details with SARS
• dispute resolution with regards to incorrect SARS assessments

• TCC-001 – tax clearance certificate in respect of tenders & good standing
• FIA001 – tax clearance certificate in respect of foreign investment allowance for individuals
• IT21 (a) – tax clearance certificate in respect of citizens emigrating from South Africa

Tax directives
A tax directive (IRP 3) is issued by SARS to instruct a fund administrator/insurance company in South Africa in terms of the amount of tax to be deducted from lump sum payments made to fund beneficiaries. Insurance companies in South Africa can take up to four weeks to obtain this essential document however with a direct link into SARS cashkows.com is able to acquire a directive within three to five working days.

SARS tax refunds to South African expats
As a South African living overseas you may have experienced the difficulties associated with claiming a tax refund from SARS. Given the reputation and good-standing of cashkows.com with SARS our tax specialists will be able to assess and resolve your case in a timely fashion.

Tax planning
As a consequence of relinquishing your tax residency status in South Africa, there are certain factors to consider as such a decision may have a serious impact on your tax position and potential liabilities with SARS. With our expertise in this particular area we will work with you to map out an effective tax plan in order to minimize and manage your tax obligation. As each case is unique we facilitate an important process to gather key information, in a structured fashion: where appropriate we are happy to work with your existing accountants and tax advisors to achieve the optimum result.

Capital gains tax calculations on emigration
South African nationals intending to emigrate from South Africa should bear in mind that their worldwide capital assets (with the exception of South African immovable property) will be subject to capital gains tax at the date that they emigrate. The tax liability is calculated as 10% of the growth in value of the assets from 1 October 2001 (or the date of purchase of the asset if later than this date) to the date of emigration.

It is also important to note that it is unlikely that another country, which may be home to some of the assets subject to the capital gains tax, will give tax credit relief for the exit charge paid upon emigration when the assets are actually disposed of in that country. This is because the capital gain in South Africa is deemed, rather than actual, because it is calculated even though there is no actual disposition of the assets. Indeed, it is possible that the same growth will be taxed by the other country at a future date.

One of the major tax implications of ceasing to be a South African tax resident is that the taxpayer is deemed to have disposed of all capital assets, other than those listed below, for capital gains tax purposes:

• Immovable property in South Africa
• Shares in a company where more than 80% of the value of the shares is attributable to immovable property in South Africa
• Certain shares obtained as a result of the emigrant's employment

A person who is not tax resident in South Africa remains liable for tax on South African sourced income (subject of course to the provisions of Double Taxation Agreements).

This is a complex and intricate area of taxation that requires meticulous planning in advance in order minimise or perhaps avoid a liability to SARS. For a complementary initial consultation and assessment of your situation why not contact cashkows.com and speak to one of our tax practitioners who specialise in this particular area.