15/06/2019
South African Expats: Is your bank spying on you on behalf of your tax agency?
What do you know about the OECD Common Reporting Standard (CRS) and automatic exchange of information?
Information exchange simply means that the South African government can learn from any participating country, either where you reside or get paid, that you made $140,000 in income (including job perks). Enabling it to claim a sorely needed $28,000 you owe due to the new expat tax, if that is you have failed to complete your financial emigration before the tax comes in early in 2020.
The one thing that South African expats don’t tend to do is tell SARS ‘I am no longer a tax resident’ – and this process doesn’t happen automatically.
If you’re emigrating or have actually emigrated from South Africa, or regard your home as being outside of the country, don’t simply assume that you’ve escaped the tax loop just because you’re no longer residing in the country. If you haven’t officially emigrated through the South African Revenue Services (SARS), you are still considered residents for exchange control purposes. On top of that, you will also miss out on significant benefits that are available to you.
Although the R1m threshold may seem generous, employment income includes allowances and fringe benefits paid to expatriates that cannot be considered as “earnings”.
The provision of housing, security and flights, among other things, are often part of the packages offered to South Africans to induce them to work in foreign locations. These benefits can quickly add up to the R1m threshold, particularly in the expensive countries in which expatriates often live.
South Africa was one of the early adapters of the Common Reporting Standard!
So, is your bank spying on you on behalf of your tax agency?...you can bet your sweet assets they are!
If you are a South African expat and you would like to discuss this further with a fully regulated adviser, then please do get in touch by simply contacting me via PM or email to [email protected]
