{"id":838748,"date":"2025-10-08T17:00:00","date_gmt":"2025-10-08T15:00:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=838748"},"modified":"2025-10-08T16:51:08","modified_gmt":"2025-10-08T14:51:08","slug":"sars-is-coming-after-these-taxpayers-leaving-the-country","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/finance\/838748\/sars-is-coming-after-these-taxpayers-leaving-the-country\/","title":{"rendered":"SARS is coming after these taxpayers leaving the country"},"content":{"rendered":"\n

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.<\/p>\n\n\n\n

According to the 2025 Henley Private Wealth Migration Report, around 250 dollar-millionaires are expected to leave the country in 2025. <\/p>\n\n\n\n

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.<\/p>\n\n\n\n

\u201cMany wealthy South Africans are moving abroad but are failing to update their tax residency with SARS. This is a dangerous mistake,\u201d said Tax Consulting SA. <\/p>\n\n\n\n

\u201cIf you don\u2019t formally cease your tax residency, you remain liable for South African tax on your worldwide income, regardless of where you live.\u201d<\/p>\n\n\n\n

The 2025 Budget Speech made clear that taxpayers earning above R1 million per year remain the backbone of the country\u2019s tax system. <\/p>\n\n\n\n

In 2024\/25, this small group comprised just 6.7% of registered taxpayers and accounted for 46% of all personal income tax. <\/p>\n\n\n\n

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.<\/p>\n\n\n\n

\u201cThese figures show how heavily South Africa\u2019s tax base depends on its wealthiest citizens,\u201d said Tax Consulting SA. <\/p>\n\n\n\n

\u201cBut they also highlight why SARS is paying such close attention to those leaving the country.\u201d High earners are among the most mobile taxpayers, and many have the means to relocate. <\/p>\n\n\n\n

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. <\/p>\n\n\n\n

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.<\/p>\n\n\n\n

\u201cThis 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,\u201d said Tax Consulting SA.<\/p>\n\n\n\n

SARS tightening its grip<\/h2>\n\n\n\n
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The firm noted that SARS is no longer taking a passive approach to compliance. <\/p>\n\n\n\n

\u201cWe 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,\u201d Tax Consulting SA said.<\/p>\n\n\n\n

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. <\/p>\n\n\n\n

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. <\/p>\n\n\n\n

\u201cYou must spend more than 183 days outside South Africa in a 12-month period, with at least 60 of those being continuous,\u201d explained Tax Consulting SA. <\/p>\n\n\n\n

\u201cOnly employees qualify for this relief, which means independent contractors and the self-employed are excluded.\u201d<\/p>\n\n\n\n

For those seeking a clean break, formally ceasing tax residency is the more permanent solution. This involves proving that you are no longer \u201cordinarily resident\u201d in South Africa. <\/p>\n\n\n\n

\u201cOnce you cease residency, you are taxed only on South African-sourced income, such as local rental properties, not on your global earnings,\u201d Tax Consulting SA said.<\/p>\n\n\n\n

Another layer of protection can come from South Africa\u2019s 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. <\/p>\n\n\n\n

However, using a DTA requires a formal application to SARS. \u201cIt does not mean you must declare South Africa no longer your home, but it does require correct procedures and compliance,\u201d the firm said.<\/p>\n\n\n\n

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. <\/p>\n","protected":false},"excerpt":{"rendered":"

Wealthy South African expatriates are facing stricter enforcement and fewer exemptions as SARS tightens its grip on compliance and targets higher revenue collection.<\/p>\n","protected":false},"author":92,"featured_media":815625,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11121],"tags":[853,12796,21727],"class_list":["post-838748","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance","tag-south-africa","tag-tax-consulting-sa","tag-the-south-african-revenue-service-sars"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/838748","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/92"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=838748"}],"version-history":[{"count":4,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/838748\/revisions"}],"predecessor-version":[{"id":839432,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/838748\/revisions\/839432"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/815625"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=838748"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=838748"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=838748"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}