These 3 countries are kicking South Africans to the curb

South African expatriates in Saudi Arabia, Qatar, and the United Arab Emirates (UAE) are facing an uncertain future as these countries tighten employment policies to prioritise local workers.

The policies, known as Saudization and Emiratisation, aim to ensure more job opportunities are filled by Saudi and UAE nationals, respectively.

As a result, many South Africans, along with other foreign workers, are unexpectedly being forced to return home.

According to Mbalenhle Mahlaba, an Expatriate Tax Specialist at Tax Consulting SA, South Africans have been moving to these countries for years because of good salaries and tax-free income.

Many work in industries like healthcare, communication, IT, education, construction, and mining. But now, with local hiring becoming a priority, skilled foreign workers are suddenly being let go with little warning.

The impact is significant, as expatriates make up an estimated 66% of the workforce in these countries.

While skilled South Africans have contributed significantly to their industries, the emphasis on local hiring means that many are losing their jobs and facing the reality of returning to South Africa.

For those returning home, the transition is not just about finding another job—it also involves tax risks.

Mahlaba warns that many South Africans who moved abroad never officially told the South African Revenue Service (SARS) that they had left.

This means SARS may still see them as tax residents, which could lead to big tax bills.

In the past, some people thought that leaving South Africa meant they no longer had to pay taxes there.

However, SARS has become very strict about tracking money made overseas.

Through a system called the Common Reporting Standards (CRS), tax authorities around the world share financial information, making it nearly impossible to hide foreign income from SARS.

For those who have not formalised their non-tax residency, there are serious consequences.

They may owe SARS tax on their worldwide income for the years they were abroad, especially if they did not declare their foreign earnings or stopped filing tax returns.

The financial impact of this oversight can be substantial, particularly for those who now find themselves unemployed and facing unexpected tax bills upon their return.

To avoid complications, South Africans returning home must take proactive steps to regularise their tax status.

One option is a Double Tax Agreement (DTA), which is a deal between South Africa and other countries (like Saudi Arabia and the UAE) to prevent double taxation.

However, Mahlaba warns that DTAs don’t automatically protect expatriates from taxes in South Africa—certain steps must be taken to qualify.

Another option is the so-called “expat exemption,” which allows tax relief on foreign income up to R1.25 million per year.

However, income exceeding this threshold remains taxable unless the individual has ceased tax residency.

For those who have been non-tax residents but are now forced to return permanently, it is crucial to notify SARS within 21 business days of their change in tax status.

Fortunately, it is possible to correct one’s tax affairs retrospectively. Mahlaba explains that expatriates who left South Africa years ago but never formalised their non-residency can backdate their request for cessation of tax residency to the date they physically left.

This can be done either under a DTA or through the financial emigration process.

For those who previously went through financial emigration but now need to return, proving their new tax residency can be tricky.

SARS requires strong evidence, such as a retrenchment letter explaining why they are returning.

A Tax Residency Certificate from the foreign country they lived in can also help prove that they were not a South African tax resident.

Not everyone returning to South Africa will immediately be taxed again.

Mahlaba says that those coming back only temporarily—because their job contracts were not renewed or they were retrenched—can still maintain their non-tax residency status.

However, they must work with tax professionals to make sure their tax situation stays in order.

For South Africans being forced to return home, the situation is already stressful without adding tax problems to the mix.

Mahlaba stresses the importance of planning ahead—whether before leaving South Africa or when coming back—to avoid financial trouble.