Financial Emigration is the formal process to note oneself as a non-resident for tax and exchange control purposes in South Africa. The process ensures that one has met all requirements under the Income Tax Act No.58 of 1962 to ensure that one is a non-resident in accordance with South Africa’s tax residency tests and also ensures compliance with all exchange control regulations for non-residency.
IS IT POSSIBLE TO BE A SHAREHOLDER OF A PRIVATE SOUTH AFRICAN BUSINESS AND HOLD A BUSINESS BANK ACCOUNT IF I FINANCIALLY EMIGRATE?
Yes, it is possible to be a shareholder of a private company and have a business account if you have financially emigrated.
IS IT POSSIBLE TO APPLY A DTA DURING THE CURRENT TAX FILING SEASON AND ONLY START THE FINANCIAL EMIGRATION PROCESS AT A LATER DATE WHEN I AM SURE OF MY INTENTION?
Yes, that is possible.
IS IT POSSIBLE TO PURCHASE SHARES AND APPLY FOR PROPERTY LOANS ONCE YOU HAVE FINANCIALLY EMIGRATED?
Yes, this is possible.
DOES FINANCIAL EMIGRATION AFFECT YOUR ABILITY TO INVEST IN SA?
No, it does not. You are still able to make investments in South Africa as a non-resident.
IS THERE A WAY TO FALL INTO A LOWER TAX BRACKET BY CLAIMING BACK FRINGE BENEFITS SUCH AS ACCOMMODATION OR COSTS OF LIVING?
Fringe benefits received by South African expatriates are included as part of their gross income. Therefore, over and above your cash salary, you would need to add these to form part of your gross income. Deductions cannot be claimed in respect of these fringe benefits.
WHAT IS THE ESTIMATED COST TO FINANCIALLY EMIGRATE?
The cost would be dependent on your particular circumstances and can only be accurately quoted upon evaluation thereof.
IS FINANCIAL EMIGRATION VALID FOR 5 YEARS?
Financial Emigration has no expiration date.
IS IT ADVISABLE TO FINANCIALLY EMIGRATE BEFORE THE MARCH 2021 CHANGES?
Yes, owing to the fact that the National Treasury has announced changes to the SARB process of Financial Emigration which is anticipated to be a more stringent verification process, involving a risk management test. As there is still uncertainty around the implementation of the changes, choosing to Financially Emigrate now would be in your best interest should you qualify to do so. The choice of whether to Financially Emigrate is dependent on whether you have a permanent intention to remain outside of South Africa or not. Should you have this intention, then it is highly recommended that you consider Financially Emigrating.
IS THERE STILL MERIT FOR ME TO FINANCIALLY EMIGRATING RIGHT NOW?
The choice of whether to Financially Emigrate is dependent on whether you have a permanent intention to remain outside of South Africa or not. Should you have this intention, then it is highly recommended that you consider Financially Emigrating.
HOW ARE YOU AFFECTED AS A TAXPAYER IF YOU OWN PROPERTY IN SOUTH AFRICA OR IF YOU FINANCIALLY EMIGRATE?
Both residents and non-residents are able to own property in South Africa.