SARS Blocking Tax Refunds for South African Expats
The South African Revenue Service (SARS) is increasingly placing tax refunds on hold for South African expats, primarily due to outdated or unverified banking and contact details.
Why refunds are being blocked
According to SARS tax compliance specialists, this issue is most common among expats and former residents who have left South Africa and closed their local bank accounts without updating their SARS profiles.
SARS has strengthened its verification and anti-fraud controls, meaning refunds are now automatically blocked when:
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Banking details are outdated, closed, or unverified
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Contact details have not been updated
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Profile information on eFiling is incomplete
Under Section 190(2) of the Tax Administration Act, SARS is only required to pay a refund once it is satisfied that all verification requirements have been met.
How expats typically encounter the problem
Many taxpayers only discover the issue after submitting a tax return and receiving notification that a refund is due but on hold due to invalid banking details. This often happens when expats submit returns to finalise tax affairs or access retirement funds, unaware that SARS still holds old local bank details.
In most cases, the refund block is not a system error, but a compliance issue linked to outdated taxpayer information.
Foreign bank refunds: allowed, but not automatic
While SARS does allow refunds to be paid into foreign bank accounts, strict requirements apply. Taxpayers must:
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Submit a SARS Foreign Refund Release form
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Provide proof of a foreign bank account in their own name
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Supply all required supporting documents
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Ensure their SARS profile and contact details are fully updated
Until this process is completed and approved, refunds will remain on hold. The process involves manual verification and can be delayed by missing documents, lack of access to eFiling profiles, or additional SARS verification requests.
SARS will also not pay refunds into call accounts, bond accounts, or credit card accounts, limiting options for taxpayers who no longer bank in South Africa.
What “refund on hold” really means
A refund being placed on hold does not mean it has been denied. It indicates that SARS requires further verification before releasing the funds. For expats, this typically means confirming foreign banking details and updating outdated personal information.
Getting refunds released
Managing a SARS refund hold from abroad can be complex. Experienced tax practitioners can:
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Identify the exact reason for the refund block
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Prepare and submit the required Release of Funds documentation
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Assist with foreign bank account verification
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Handle SARS correspondence and follow-ups
With SARS’s tighter controls, keeping taxpayer profiles up to date is essential. Expert guidance can significantly reduce delays and help ensure refunds are released in full compliance with SARS requirements.
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