Taking your money out of South Africa harder than you think
In South Africa, during tough economic times, wealthy individuals are thinking about moving themselves or their money overseas. This is because of slow growth, struggling state-owned enterprises, and high unemployment rates.
Nonetheless, being a tax resident of South Africa, you are liable to pay tax on your global income.
At a recent event in Henley, many people asked, "How can we take our money out of South Africa?"
SARS introduced a new system for South Africans looking to take money offshore, called the Approval for International Transfer (AIT).
In April 2023, a new process was introduced to make taxes easier. However, Tax Consulting SA reported that some advisors and clients are having trouble following SARS's stricter rules on international transfers.
Compliance challenges
SARS improved its process for approving money movements, especially for foreign assets, which made sense from their point of view.
The AIT Pin is required for both non-resident and resident taxpayers in South Africa. This is for those who want to transfer funds exceeding R1 million out of the country.
To get residency or citizenship through a golden visa program, applicants must have an AIT. This applies to all programs available.
SARS quickly issues the AIT Pin after receiving all required documents and conducting a funds analysis for transfer. The AIT Pin is issued promptly once all necessary documents are received. SARS conducts a reasonability analysis on the funds before issuing the AIT Pin. The AIT Pin is quickly issued after SARS reviews all required documents and completes a funds analysis.
If the AIT needed is over R10 million (after R1 million SDA), the South African Reserve Bank (SARB) must approve it.
This level of following rules can be a problem for many wealthy people if they don't use the right channels.
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