South African expatriates who have previously ceased their tax residency are often surprised by unexpected additional assessments raised by the South African Revenue Service (SARS). <\/p>\n\n\n\n
According to Tax Consulting SA, this situation is becoming increasingly common, as many taxpayers are unaware that changing their tax residency status during a tax year can result in split tax returns under Section 9H of the Income Tax Act 58 of 1962 (ITA).<\/p>\n\n\n\n
The consulting firm notes that SARS reserves the right to conduct further reviews of previous assessments according to the Tax Administration Act. <\/p>\n\n\n\n
As a result, there have been many instances where previous tax assessments were revised to reflect the implications of taxpayers ceasing to be tax residents.<\/p>\n\n\n\n
Such revisions, according to Tax Consulting, are carried out in accordance with Section 9H(2)(b) and (c) of the ITA. These reassessments can result in tax liabilities that vary from minimal to substantial. <\/p>\n\n\n\n
Therefore, the firm urges taxpayers to understand the tax implications of ending their South African tax residency.<\/p>\n\n\n\n
The latest SARS statistics indicate that over 51,500 taxpayers successfully ceased their tax residency between 2017 and 2024. <\/p>\n\n\n\n
This suggests that a significant number of expatriates could be affected by the split tax return laws that apply in the year their tax residency is terminated.<\/p>\n\n\n\n
For these taxpayers, the tax year is effectively divided into two assessment periods. The first period ends on the day before the cessation of residency, during which the taxpayer is taxed as a South African tax resident on their worldwide income. <\/p>\n\n\n\n
The second period begins on the date of cessation and continues until the end of the tax year, during which the taxpayer is taxed as a non-resident solely on South African-sourced income.<\/p>\n\n\n\n
Starting from 1 March 2024, SARS has integrated a cessation feature into the 2025 income tax return wizard.<\/p>\n\n\n\n
Tax Consulting SA said this feature is designed to assist taxpayers who have received their non-residency confirmation letters from SARS regarding cessations that occurred during the 2025 tax period and beyond. <\/p>\n\n\n\n
Reportedly, this feature aims to help them accurately manage the implications of filing split tax returns. <\/p>\n\n\n\n
Additionally, the firm said this could minimise the number of cases in which SARS would need to reassess relevant evaluations to account for the split tax treatment during a period when tax residency has ended.<\/p>\n\n\n\n
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