Out of the Frying Pan, Into the Fire
In April 2023, SARS introduced the new Approval International Transfer (AIT) Tax Compliance Status (TCS) Pin, which replaced the “Emigration” TCS Pin and the “Foreign Investment Allowance” (“FIA”) TCS Pin.
The AIT TCS Pin is now the go-to requirement for SA tax residents to transfer more than R1 million of capital abroad, per year, and in the case of tax non-residents, every cent of capital that is transferred out of SA (outside of certain limited scenarios).
Initially, this new “enhanced” AIT process appeared to be simplifying the previous complex one. However, the documentation and information now required by SARS are much more extensive than before, making the process far more meticulous and burdensome.
One such onerous process is the disclosure of your tax residency status if you are a SA tax non-resident. When you tick this box during the AIT TCS Pin process, you will need to supply SARS with your Non-Resident Tax Status. If you have not yet obtained this, it may frustrate the process or result in a rejection by SARS.
Additionally, throughout the process, one needs to disclose both their local and foreign assets and liabilities (at cost), along with the sources of the value sought to be transferred and documentary evidence in this regard.
The introduction of the AIT TCS Pin follows the theme of SARS introducing new systems and requirements that contrast the sentiments set out in the 2021 Budget Speech. To a significant degree, these changes have been unavoidable, with SA needing to comply with the measures required by the Financial Action Task Force following the grey-listing of SA.
Nevertheless, these new changes have placed SA expats at a crossroads – do they maintain their financial ties with SA, or do they cut the cord and leave the SA tax net behind?