If you’re an expat and have recently received a letter from SARS requesting documentation to verify your non-resident tax status, you’re not alone. Many expats eager to formalise their tax status as non-resident are being asked to provide supporting documents, and unfortunately, many are caught off guard by this requirement.
The letter is part of a stricter verification process recently introduced by SARS. The process is triggered by previous declarations on your SARS eFiling profile, highlighting the importance of having up-to-date documentation to support your non-resident tax status.
Is Your SARB Emigration Confirmation Still Valid?
A common question from expats is whether the “Emigration Confirmation Letter” issued by the South African Reserve Bank (SARB) before March 2021 is enough to prove their non-resident status. Unfortunately, the answer is no. While this letter was once sufficient, SARS has since tightened its verification procedures. The SARB letter alone no longer meets the criteria for proving tax non-residency.
The Changing Rules for Expats
SARS has a reputation for shifting the goalposts when it comes to expat taxation. The most recent change now requires expats to re-verify their tax non-resident status through the SARS eFiling system. Failing to comply with this updated requirement can result in you being treated as a tax resident, leading to automatic tax assessments and potential penalties.
This can be particularly frustrating for those who had previously followed all the correct steps and filed their taxes appropriately. However, adapting to these new processes and ensuring your non-resident status is properly verified is crucial to avoid future issues.
Why You Must Act Quickly
One of the biggest concerns is that SARS has reset the tax residency status of many expats to “resident” on their eFiling profiles. Even if you’ve previously declared yourself a non-resident or obtained a Tax Clearance Certificate for Emigration along with your SARB confirmation, it’s important to update your status with the correct cessation date.
If you receive a tax residency verification request from SARS, do not ignore it. Immediate action is required to provide the necessary documentation and confirm your non-residency status. Once SARS completes the verification process, your profile will be officially updated to “non-resident,” and you will receive a formal Notice of Non-Resident Tax Status Confirmation Letter. This letter is essential for future tax return submissions, confirming that you are no longer subject to South African tax laws as a resident.
What Should Expats Do Next?
If you ceased your tax residency under the old regime but have not yet received formal confirmation from SARS, your next step is to apply for the Notice of Non-Resident Tax Status Confirmation Letter. This request is not just a warning—it’s an opportunity to prevent potential tax risks and non-compliance.
By ensuring that your tax residency status is properly updated and verified, you can avoid unnecessary penalties, automatic assessments, and maintain peace of mind when filing future tax returns as a non-resident of South Africa.
