Expatriates, before submitting their 2024 tax return, must ensure their status aligns with the updated South African Revenue Service (SARS) requirements in order to avoid audits, penalties, and other compliance issues. SARS has implemented new verification processes for expatriates claiming non-resident tax status.

Challenges in Proving Non-Residency

Expatriates who assumed their non-resident tax status was secured are facing challenges as SARS now demands more rigorous documentation. An "Emigration Confirmation Letter" previously issued by the South African Reserve Bank (SARB) before March 2021 is no longer sufficient. SARS's intensified verification measures require additional supporting documents to validate tax non-residency.

The Impact of SARS's Updated Policies

SARS has been adjusting its requirements for expatriates, recently necessitating a re-verification of non-resident status through eFiling. Failure to comply with these new verifications will result in being classified as a tax resident, leading to automatic tax assessments and possible penalties. This shift has frustrated many South Africans abroad who have complied with previous protocols.

What Expatriates Need to Do

Expatriates must respond promptly to any SARS verification requests to update their tax residency status. Successfully providing the necessary documents will lead to the formal recognition of non-resident status on SARS’s eFiling system, culminating in the issuance of a Notice of Non-Resident Tax Status confirmation letter. This step is essential for all future tax submissions as a non-resident.