Emigration options

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Jack Welles
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Re: Emigration options

Unread post by Jack Welles » Sat Jan 19, 2019 9:00 pm

cage wrote:
Sat Jan 19, 2019 4:15 pm
Personally I would be more concerned about the proposal for prescribed assets on pension funds.
That should really wind up the duracell bunnies :twisted:
I agree with this. It didn't work at all well back in the 70's and 80's (really screwed with the economy) and one would have thought that lesson was learnt. Short term it looks like a good idea but it won't work out well if it's done again :evil:
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Re: Emigration options

Unread post by Burner » Sun Jan 20, 2019 1:30 pm

snoopy wrote:
Sat Jan 19, 2019 11:24 am
The new tax law amendment states you will pay 45% on any foreign earning exceeding ZAR1 million per annum to SARS. As from 1 March 2020...next year.

Anyway, just be aware of this... if you are emigrating now.
Not entirely correct. Your first 1 Mil ZARS are tax free, provided you spend 183 days outside of SA and one period of 60 days consecutive. Above 1 million, the clock resets to zero on the taxable amount you will have to pay. So if you earn 1.195 millions, you will be taxed as if you earned 195 000 ZAR and be taxed at 18 percent for example.

So the statement is that you could be taxed UP TO 45 percent of foreign earnings above 1 million ZARS.
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Re: Emigration options

Unread post by Nicolaas206 » Mon Jan 21, 2019 8:31 am

Burner wrote:
Sun Jan 20, 2019 1:30 pm
snoopy wrote:
Sat Jan 19, 2019 11:24 am
The new tax law amendment states you will pay 45% on any foreign earning exceeding ZAR1 million per annum to SARS. As from 1 March 2020...next year.

Anyway, just be aware of this... if you are emigrating now.
Not entirely correct. Your first 1 Mil ZARS are tax free, provided you spend 183 days outside of SA and one period of 60 days consecutive. Above 1 million, the clock resets to zero on the taxable amount you will have to pay. So if you earn 1.195 millions, you will be taxed as if you earned 195 000 ZAR and be taxed at 18 percent for example.

So the statement is that you could be taxed UP TO 45 percent of foreign earnings above 1 million ZARS.
Also from what I've read (correct me if I'm wrong), is that you will only pay the difference in tax %. Using your example, if you pay 10% tax on R 1.195 million in the country you live in, then you need to pay the remaining 8% tax to SARS (18% - 10% = 8%).

I am considering financial emigration to avoid paying SARS/ANC anything ever again.
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Re: Emigration options

Unread post by hugo_visser » Mon Jan 21, 2019 9:56 am

I understand only the difference on the .195, the 1 mil is exempt.
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Re: Emigration options

Unread post by Burner » Mon Jan 21, 2019 10:10 am

Affirm. To be perfectly honest SA is just following suit with the rest of the world. Most countries in the world are clamping down on their citizens exploiting tax loop holes, and not paying any tax any where in the world. The problem is the effect this has folk sitting in countries paying exorbitant overheads for accommodation, schooling etc, whilst may in some cases be not paying any income tax due to local tax laws.

Both countries where I hold offshore accounts, whom are both traditional tax havens, have made my bank find out where I am tax resident and what my income tax number is.

Hopefully this 1 million ZAR exemption is adjusted annually in line with inflation and the ZAR exchange rate with global currencies.
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Re: Emigration options

Unread post by cage » Mon Jan 21, 2019 11:20 am

Burner wrote:
Mon Jan 21, 2019 10:10 am
Both countries where I hold offshore accounts, whom are both traditional tax havens, have made my bank find out where I am tax resident and what my income tax number is.
The various nations have agreed to share information so it becomes impossible to hide money offshore.
There used to be amnesties for declaring funds, that really isn't needed anymore as it has become easy to trace.
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Re: Emigration options

Unread post by Fransw » Mon Jan 21, 2019 12:28 pm

cage wrote:
Mon Jan 21, 2019 11:20 am
Burner wrote:
Mon Jan 21, 2019 10:10 am
Both countries where I hold offshore accounts, whom are both traditional tax havens, have made my bank find out where I am tax resident and what my income tax number is.
The various nations have agreed to share information so it becomes impossible to hide money offshore.
There used to be amnesties for declaring funds, that really isn't needed anymore as it has become easy to trace.
There are still ways to go under the radar, Sark for example, etc.. But then you are a fugitive or criminal on the "run". Is it worth it? NOO!!
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Re: Emigration options

Unread post by heinrich » Mon Jan 21, 2019 1:32 pm

cage wrote:
Sat Jan 19, 2019 1:06 pm
vanjast wrote:
Sat Jan 19, 2019 12:17 pm
It'll be many things, but for Expats this Extra Tax on top of the Double Taxation will be the final nail in the coffin (this will be about the money that the SARS legal system is 'effectively stealing') for SA.
So the US also "steals" tax revenue from their citizens working abroad?
This isn't a South African concept.
If you want to cut ties with the country and not pay tax then you are able to do so.
It has been discussed before but some yanks do give up their citizenship to avoid taxation on offshore wealth.

If you are maintaining your ties, intending to return, but wanting to make some quick tax-free cash then SARS will be coming for you, rightly so.
Why expect everyone else to pay taxes to fund the country so you can take advantage of it later?
That's a bit of a free ride.

You can't have your cake and eat it (without paying the tax on it).
There's a big difference between someone going abroad for a limited time (2 years for example) to work on a company project, and then return to SA. I agree, they cannot escape being taxed in this way. I have declined some contracts on the EU continent because I know the UK operates in the same way. (in one case with Switzerland).

I do however have a problem with being taxed when I haven't been in the country for almost 4 years and not planning to return, unless there are circumstances I cannot control. Why should I be "forced" to give my up citizenship so I can avoid being taxed in this way?

I see my initial response wasn't directly answered: When you apply for "financial emigration", will this rule still apply to you? (i.e. without giving up your SA residency).
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Re: Emigration options

Unread post by cage » Mon Jan 21, 2019 1:55 pm

heinrich wrote:
Mon Jan 21, 2019 1:32 pm
I do however have a problem with being taxed when I haven't been in the country for almost 4 years and not planning to return, unless there are circumstances I cannot control. Why should I be "forced" to give my up citizenship so I can avoid being taxed in this way?
In the US context, AIUI, that is the only way to avoid it.
As it stands in SA, and I may have the wrong end of the stick, if you can show you have no ties to the country - ie no property as an example - then this wouldn't be necessary, not sure if proposed changes affects this.
No one is being forced to do anything, apart from pay tax. Giving it up is voluntary because it makes financial sense to do so.

Devil's advocate would say (and they have a few devils at SARS) - if you aren't planning to return then giving up your right to shouldn't be a problem.
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Re: Emigration options

Unread post by Jack Welles » Mon Jan 21, 2019 2:05 pm

heinrich wrote:
Mon Jan 21, 2019 1:32 pm
I do however have a problem with being taxed when I haven't been in the country for almost 4 years and not planning to return, unless there are circumstances I cannot control. Why should I be "forced" to give my up citizenship so I can avoid being taxed in this way?
I see my initial response wasn't directly answered: When you apply for "financial emigration", will this rule still apply to you? (i.e. without giving up your SA residency).
First of all, there is no "legal" thing in SA tax law called "financial emigration". It's a construct put together by "advisors" tht want to make money out of expats. You will find it a lot on Internet "financial advisors'" websites (often of dubious stature with incorrect legal terminology).

Secondly, to your question/comment (highlighted above). The simple answer is that you don't have to give up your SA "citizenship" (note: different to "residency") to avoid being taxed in SA if you are an expat.

If you do not meet the "residency" requirements (as SA defined) you will not be taxed on your world-wide income in SA.

If you are a "non-resident" (in SA tax law definition) you will only be taxed in SA on any income earned from a source in SA.

I suspect the problem is in your use of the word "residency" (also highlighted above). What do you mean by that? The legal tech term or some loose way of saying "citizenship"? if it's the latter you won't have a problem. With law each word matters.
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Re: Emigration options

Unread post by heisan » Mon Jan 21, 2019 2:18 pm

Perhaps this reserve bank FAQ will be useful:
https://www.resbank.co.za/RegulationAnd ... rants.aspx

It basically comes down to this:
"In terms of exchange control policy, private individuals (natural persons) who reside permanently in a country outside the Common Monetary Area are required to formalise their emigration by completing a Form MP336(b)."

For many people, it has no practical effect, other than to allow them to keep a South African bank account with a foreign address.
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Re: Emigration options

Unread post by heinrich » Mon Jan 21, 2019 2:38 pm

Jack Welles wrote:
Mon Jan 21, 2019 2:05 pm
heinrich wrote:
Mon Jan 21, 2019 1:32 pm
I do however have a problem with being taxed when I haven't been in the country for almost 4 years and not planning to return, unless there are circumstances I cannot control. Why should I be "forced" to give my up citizenship so I can avoid being taxed in this way?
I see my initial response wasn't directly answered: When you apply for "financial emigration", will this rule still apply to you? (i.e. without giving up your SA residency).
First of all, there is no "legal" thing in SA tax law called "financial emigration". It's a construct put together by "advisors" tht want to make money out of expats. You will find it a lot on Internet "financial advisors'" websites (often of dubious stature with incorrect legal terminology).

Secondly, to your question/comment (highlighted above). The simple answer is that you don't have to give up your SA "citizenship" (note: different to "residency") to avoid being taxed in SA if you are an expat.

If you do not meet the "residency" requirements (as SA defined) you will not be taxed on your world-wide income in SA.

If you are a "non-resident" (in SA tax law definition) you will only be taxed in SA on any income earned from a source in SA.

I suspect the problem is in your use of the word "residency" (also highlighted above). What do you mean by that? The legal tech term or some loose way of saying "citizenship"? if it's the latter you won't have a problem. With law each word matters.
I meant citizenship in this context of course, my choice of words were wrong.

That's good news then (as I suspected all along but wasn't 100% sure).

In terms of being "forced" to give it up, as . I agree, no one is forcing me to do that. But I've learnt along the way that to have your options open is never a bad thing. Hence the reluctance to simply give up my citizenship for the sake of it. I have no bank accounts nor any other assets in SA anymore, apart from an RA policy that I am trying to get released earlier, so I can tx the funds out of SA. So I am already aware of SARB's 336(b) form.
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Re: Emigration options

Unread post by Jack Welles » Mon Jan 21, 2019 3:26 pm

heisan wrote:
Mon Jan 21, 2019 2:18 pm
Perhaps this reserve bank FAQ will be useful:
https://www.resbank.co.za/RegulationAnd ... rants.aspx

It basically comes down to this:
"In terms of exchange control policy, private individuals (natural persons) who reside permanently in a country outside the Common Monetary Area are required to formalise their emigration by completing a Form MP336(b)."

For many people, it has no practical effect, other than to allow them to keep a South African bank account with a foreign address.
I think that's a valid point. It seems to me that people muddle SARS requirements with SARB requirements, then get their knickers in a knot.

Effectively, the two, of course, have nothing to do with each other.
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Re: Emigration options

Unread post by heinrich » Mon Jan 21, 2019 4:00 pm

Jack Welles wrote:
Mon Jan 21, 2019 3:26 pm
heisan wrote:
Mon Jan 21, 2019 2:18 pm
Perhaps this reserve bank FAQ will be useful:
https://www.resbank.co.za/RegulationAnd ... rants.aspx

It basically comes down to this:
"In terms of exchange control policy, private individuals (natural persons) who reside permanently in a country outside the Common Monetary Area are required to formalise their emigration by completing a Form MP336(b)."

For many people, it has no practical effect, other than to allow them to keep a South African bank account with a foreign address.
I think that's a valid point. It seems to me that people muddle SARS requirements with SARB requirements, then get their knickers in a knot.

Effectively, the two, of course, have nothing to do with each other.
True to an extent, but for the above MP336(b) form they are very much interlinked. SARB requires SARS to "sign off" on the applicant's tax status. Without that SARB won't grant you your non-resident status.
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Re: Emigration options

Unread post by Jack Welles » Tue Jan 22, 2019 8:10 am

heinrich wrote:
Mon Jan 21, 2019 4:00 pm
Effectively, the two, of course, have nothing to do with each other.
True to an extent, but for the above MP336(b) form they are very much interlinked. SARB requires SARS to "sign off" on the applicant's tax status. Without that SARB won't grant you your non-resident status.
:D I can see how they might seem "interlinked" but (we're getting very technical here and maybe somewhat esoteric) FYI the legal requirements for "non-resident" for SARB purposes (one of them being that there is no outstanding liability for SA tax, to which you are referring and which are the "apples") is different to the legal requirements that determine whether a person is a "resident" or a "non-resident" for SA tax purposes. In other words the one set of resident/non-resident laws has no effect on the other set of resident/non-resident laws to which I was referring and which are the "oranges".

In addition, the historical tax status of an individual (ie, whether they owe money or not and to which you are referring and which are still the "apples") does not affect his or her "resident" or "non-resident" status for SA tax purposes to which I was referring and which are still the "oranges".

The law is elementary, my dear Watson :lol:

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