TAX EMIGRATION FROM SOUTH AFRICA: What It Really Means and Why Getting It Wrong Can Cost You Millions

If you’re a South African living abroad or planning to move overseas, you’ve probably heard of “tax emigration” — and just as likely, you’re confused about what it actually involves.

In recent years, SARS has tightened its grip on South Africans working or living abroad. Simply leaving the country is no longer enough — and getting the process wrong can lead to double taxation, penalties, or even being audited years later.

At ACS Plus, we specialise in helping individuals and business owners exit the South African tax system cleanly, legally, and strategically. Here's what you need to know.

What Is Tax Emigration?

Tax emigration is the formal process of ceasing to be a tax resident of South Africa. It involves informing SARS that you are no longer ordinarily resident or meeting the physical presence test, and updating your tax status accordingly.

Once approved, you are treated as a non-resident for tax purposes, which changes how you're taxed on:

• Worldwide income (you no longer pay SA tax on it)

• Capital gains

• Dividends and interest earned in SA

Important: This is not the same as financial emigration (via the Reserve Bank), which has been phased out.

What Does the Tax Emigration Process Involve?

1. Cease Tax Residency Declaration on your SARS profile

2. Supporting documents, including proof of residence abroad and a detailed motivation

3. Final income tax return and possible Capital Gains Tax (Exit Tax) on worldwide assets

4. Possible audit or further SARS queries

Once approved, you’ll receive a Notice of Non-Resident Tax Status, which is critical for dealing with banks, CIPC, and financial institutions.

What Can Go Wrong?

❌ Not informing SARS

Just leaving the country or stopping work in SA doesn’t mean you’ve emigrated for tax. SARS will continue to treat you as tax resident unless formally notified.

❌ Exit Tax surprises

When you emigrate, SARS may treat you as if you’ve sold your global assets — triggering a capital gains tax event. If not planned correctly, this could lead to a massive, unexpected tax bill.

❌ Double taxation

Without the correct tax residency status and double taxation agreements (DTAs) in place, you might end up paying tax in both South Africa and your new country.

What If You Still Own a Business or Property in South Africa?

As a non-resident, you will still be liable for tax on South African-sourced income, such as:

• Rental income

• Dividends from a South African company

• Business profits from a SA-registered entity

But the tax treatment is different — and failing to update SARS and CIPC records properly can create compliance nightmares.

We help non-residents:

✅ Stay compliant with South African tax laws

✅ Manage South African entities from abroad

✅ Avoid tax leakage across jurisdictions

✅ Ensure proper withholding taxes are applied on dividends or royalties

Real Example

A client working in Dubai failed to formalise his tax emigration. SARS assumed he was still resident and taxed him on foreign income earned over three years — resulting in a R1.2 million back-tax bill, plus penalties.We helped him appeal, regularise his tax affairs, and recover over 60% of the penalties — but proper advice up front could’ve prevented the issue entirely.

How We Can Help

At ACS Plus, we offer:

✅ Tax Emigration strategy and support

✅ Exit Tax calculations and planning

✅ Representation in SARS audits or disputes

✅ Ongoing management of non-resident tax compliance

✅ Support for offshore trusts, South African companies, and property portfolios

Thinking of Leaving South Africa or Already Living Abroad?

Whether you’re relocating permanently or already overseas, don’t let SARS catch you off-guard. Tax emigration is more than just paperwork — it’s a critical financial decision.

Book a confidential consultation to review your residency status, tax risks, and business interests in SA. 

Email queries@acsplus.co.za with the header: Tax Exit Strategy