SARS tightening regulations for those who want to get out of SA’s tax net

SARS has issued guidelines for becoming a non-resident for tax purposes.

  • SARS has issued guidelines for taxpayers who want to suspend their tax residence in South Africa.
  • Taxpayers must provide relevant documents. Otherwise, there is a risk that the declaration will be rejected by SARS.
  • False declarations as a non-resident taxpayer can pose tax risks, including fines and interest.

Revenue Service (SARS) has issued guidelines for taxpayers who want to stop having a tax residence in South Africa this year’s tax season.

When a person ceases to be a tax resident of South Africa, he or she will no longer be taxed in South Africa on his global income, but only on income originating in South Africa.

According to the SARS siteTo cease to be a tax resident, you must file a tax return (ITR12). SARS will then provide you with a request for relevant documentation to substantiate your declaration.

Alternatively, the taxpayer can submit a declaration to SARS by email that he is no longer a tax resident. It must also be accompanied by a signed declaration demonstrating the qualifications, a motivational letter stating the facts and circumstances supporting the declaration, and supporting documents such as a copy of your passport.

“Importantly, this confirms that SARS does not simply accept your declaration. Whether you applied the test correctly and, more importantly, your facts are yours. We’ll see if it supports our position, “said Tax Consulting South African Tax Managers Thomas Roban Victoria Lancefield and Reabetswe Moloi in a memo.

The author wrote that the taxpayer is a tax resident, taking into account the “foreign tax” that came into effect on March 1, 2020 and the three-year lockup of severance pay when South Africans leave the country. It explains that you can choose to go away. March 1, 2021.

With the new tax change, SA taxpayers working abroad will only be exempt from paying the tax of R $ 1.25 million, which they first earned abroad. After that, you will have to pay taxes on the income you earn abroad.

SARS may refuse to file a tax return if the taxpayer does not meet the requirements for becoming a tax resident or if the taxpayer does not provide the appropriate or correct documents requested.

“With this latest development, there is no doubt that SARS is actively targeting foreigners in South Africa,” said Tax Consulting South Africa.

“This tax-based segment is important to SARS and cannot be deducted without being satisfied with what is allowed and being done correctly.”

“It is important to emphasize that suspension of residence causes a chain of tax implications. If you think your retirement may not be complete, we recommend that you do a complete tax diagnosis. “I will,” they added. This includes ensuring that you have applied the test correctly, used the correct end date, that your tax calculations are accurate, and that you have the relevant documentation to support your position.

“It is important to carry out this exercise and make the necessary amendments before SARS reveals them. False declarations as a non-resident taxpayer usually result in a significant tax burden, including fines and interest. Will occur.

“But there may be a small opportunity to file a voluntary disclosure application that provides amnesty from criminal charges and underestimated penalties.”

SARS tightening regulations for those who want to get out of SA’s tax net

Source link SARS tightening regulations for those who want to get out of SA’s tax net

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