Tax Focus

SARS’s new tax compliance disclosure requirements for transferring funds abroad

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SARS takes a leap forward for taxpayers! SARS has enhanced its Tax Compliance Status (TCS) application process and forms. Now, dealing with the increasing number of taxpayers requesting 3rd party verification requests, including Foreign Investment Allowance and Emigration, is easier than before!
What you need to know

What does this mean for you?

It means a hassle-free experience when it comes to managing your tax compliance status. The enhanced TCS system was introduced on 24 April 2023 by SARS following its consultations with authorised dealers and the SARB (South African Reserve Bank).

Taxpayers who wish to transfer funds abroad will be required to obtain the approval for International Transfer (AIT) pin from SARS if the funds to be transferred exceed R1 million but up to R10 million in a calendar year. No AIT pin is required for transfers of a single discretionary allowance of up to R1 million in a calendar year.

A stricter verification process will be applied by SARS where the Foreign Investment Allowance exceeds R11 million. An application for a Letter of Compliance will need to be made to SARS and this application is also subject to the SARB approval.

What are the requirements?

  • You will be required to indicate your South African Tax Residency Status when applying for the AIT pin. If you are a non-resident taxpayer, you will be required to provide the following information to SARS:
  • Confirmation that you have ceased to be a resident of South Africa for tax purposes, including the date on which you ceased to be a resident.
  • Detailed Capital Gains Tax Calculation schedule relating to any tax payable on deemed disposal of assets on the day before you ceased to be a tax resident.

Separate non-resident applications are accepted for each member of the family unit.

You will also be required to confirm the following on your application for the AIT pin:

  • Whether you are a beneficiary of a Trust(s)?
  • Whether you have a shareholding directly/indirectly in any Legal Entity (Local or Foreign) of 20% or more?
  • Whether you have an existing loan(s) to a Trust (Local or Foreign)?

Which supporting documents do you have to submit?

  • Relevant material that demonstrates the source of the capital to be invested. (SARS has provided nine distinct types of “source(s)” for selection and one additional option for “other” sources. Types of source(s) include loans, donations, inheritance, sale of crypto assets, etc.)
  • Statement of assets and liabilities for the previous three tax years (this should include disclosure of all investments, loan accounts and distributions from local and foreign companies, trusts, etc.).
  • All supporting documentation provided to SARS in respect of the approval for International Transfer is subject to the verification process.

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