Are You a Tax Resident in South Africa? Here’s How to Determine Your Status

Understanding your South African tax residency status is critical if you’re living or working abroad. Many South African expatriates assume they are no longer tax residents once they leave the country, but SARS applies strict criteria to determine whether you still have tax obligations in SA.

This article breaks down the key factors that determine your tax residency and helps you navigate the complex rules that could affect your tax liability.

Key Factors in Determining Tax Residency

1. Ordinary Residence Test If you consider South Africa your permanent home, you may still be classified as a tax resident, even if you spend most of your time abroad. Strong ties to South Africa, such as a family home, dependents, or business interests, can indicate ordinary residence.
2. Physical Presence Test Even if you don’t qualify under the ordinary residence test, you may still be considered a tax resident if you have spent significant time in SA. The test looks at whether you’ve spent: 91 days or more in SA in the current tax year 91 days or more in SA during each of the preceding five tax years; and 915 days or more over the past five tax years If you exceed these thresholds, you could be classified as a tax resident.
3. Double Taxation Agreements (DTAs) If you are tax resident in another country, a DTA between South Africa and that country may override SA’s tax residency rules. DTAs define which country has the right to tax your income and help prevent double taxation.
4. Foreign and South African Assets Holding significant South African-based assets could impact your tax residency. If you own foreign assets, understanding how they are taxed in SA is crucial.
5. Formal Emigration & SARS Notification Simply leaving the country does not end your tax residency. To officially cease tax residency, you need to formally notify SARS and undergo a tax emigration process.

Not Sure Where You Stand? Use This Flowchart

To help you determine your tax residency status, we’ve created a simple flowchart that outlines the decision-making process. Follow the steps to see whether you qualify as a tax resident and what actions you may need to take. Click on the image to download/ make it bigger.

Why This Matters

If you’re incorrectly classified as a tax resident, you could be liable for unexpected tax obligations in SA, including on foreign income. On the other hand, if you are legally non-resident, you may be able to benefit from tax exemptions on foreign earnings.

Navigating tax residency rules can be complex and getting it wrong can be costly. If you’re unsure, it’s best to consult a qualified tax advisor to assess your situation and ensure you remain compliant while optimising your tax position. Get in touch with us for your peace of mind.

Meet the author

Vanessa Turnbull-Kemp

Vanessa Turnbull-Kemp, our head of SA Outbound Structuring, based in Johannesburg. Contact Vanessa at?[email protected].