SARS is coming after these taxpayers leaving the country
Wealthy South African expatriates are facing stricter enforcement and fewer exemptions as SARS tightens its grip on compliance and targets higher revenue collection, with high earners firmly in the crosshairs.
According to the 2025 Henley Private Wealth Migration Report, around 250 dollar-millionaires are expected to leave the country in 2025.
However, despite this trend of outward migration, the number of taxpayers who formally cease tax residency with the South African Revenue Service (SARS) is in decline.
“Many wealthy South Africans are moving abroad but are failing to update their tax residency with SARS. This is a dangerous mistake,” said Tax Consulting SA.
“If you don’t formally cease your tax residency, you remain liable for South African tax on your worldwide income, regardless of where you live.”
The 2025 Budget Speech made clear that taxpayers earning above R1 million per year remain the backbone of the country’s tax system.
In 2024/25, this small group comprised just 6.7% of registered taxpayers and accounted for 46% of all personal income tax.
By 2025/26, the burden has grown even heavier, with 7.3% of taxpayers in this bracket paying nearly half (48.6%) of all personal income tax collected.
“These figures show how heavily South Africa’s tax base depends on its wealthiest citizens,” said Tax Consulting SA.
“But they also highlight why SARS is paying such close attention to those leaving the country.” High earners are among the most mobile taxpayers, and many have the means to relocate.
SARS Commissioner Edward Kieswetter recently confirmed that the High Wealth Individual Unit (HWIU) had identified roughly 2,800 South Africans with assets exceeding R50 million, holding a combined R150 billion offshore.
SARS data reveals that while migration remains high, fewer are formally exiting the system. In 2014, 4,102 taxpayers earning above R1 million declared a change in tax residency. By 2023, the number had dropped to 1,722.
“This raises the critical question of whether all those leaving are following the correct process. If not, they may face unpleasant surprises in the form of unexpected tax bills,” said Tax Consulting SA.
SARS tightening its grip
The firm noted that SARS is no longer taking a passive approach to compliance.
“We increasingly see SARS issuing detailed information requests, including company financials, rental income, capital gains calculations, and even crypto-related records. They are casting their net wider than ever before,” Tax Consulting SA said.
For South Africans moving abroad, the assumption that tax obligations end at the border is no longer safe. Instead, individuals must carefully consider the available mechanisms to reduce their tax exposure.
One option is the Section 10(1)(o)(ii) foreign employment income exemption, which allows South African residents working abroad to avoid double taxation, provided they meet strict requirements.
“You must spend more than 183 days outside South Africa in a 12-month period, with at least 60 of those being continuous,” explained Tax Consulting SA.
“Only employees qualify for this relief, which means independent contractors and the self-employed are excluded.”
For those seeking a clean break, formally ceasing tax residency is the more permanent solution. This involves proving that you are no longer “ordinarily resident” in South Africa.
“Once you cease residency, you are taxed only on South African-sourced income, such as local rental properties, not on your global earnings,” Tax Consulting SA said.
Another layer of protection can come from South Africa’s network of double taxation agreements (DTAs) with other countries. These treaties can provide temporary relief for taxpayers who do not fit neatly into the categories above.
However, using a DTA requires a formal application to SARS. “It does not mean you must declare South Africa no longer your home, but it does require correct procedures and compliance,” the firm said.
Whether making use of the foreign employment exemption, ceasing tax residency altogether, or relying on a DTA, the key is proper planning and professional advice.
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