Completing a tax return for a non-resident who has ceased to be resident in the current, or any prior year of assessment

The 2021 annual income tax return now requires a taxpayer to answer “YES” in the wizard form if he/she ceased to be resident in any year of assessment, not just the 2021 year of assessment.

Where a tax return is completed for a non-resident who has ceased to be resident in the current, or any prior year of assessment, it should be ensured that the question is answered and that the date on which the person ceased to be resident is inserted.

Some taxpayers are receiving letters from SARS asking for the following information/documentation where it has been declared that such taxpayer is a non-resident for tax purposes i.e. answered YES to the question whether he/she ceased to be resident in any year of assessment.  The letter states that the information is required to verify the taxpayer’s status as non-resident.  The list of information and documents below is an extract from the letter issued by SARS:

Standard requirements

• The signed declaration indicating the basis on which you qualify (you can download the form from the SARS website, www.sars.gov.za)
• A letter of motivation setting out the facts and circumstances in detail to support the disclosure that you have ceased to be a tax resident.
• A copy of your passport/travel diary.

Specific requirements

In addition to the aforementioned information, also supply the following as applicable:

Qualifying basis 1: Cease to be ordinarily resident

• The type of visa on which you have gone to the foreign country.
• Where you have already taken up permanent residence in the foreign country, submit proof thereof.
• A certificate of tax residence from the foreign revenue authority or a letter from the authority that indicates that you are regarded as a tax resident in that country (If available).
• Details of any property that you may still have available in South Africa (Indicate the purpose that such property is being used for)
• Details of any business interest (e.g. investment and employment) that you may still have in South Africa.
• Details of your family. Indicate whether any family members are in South Africa and the reason thereof.
• Details of your social interests (e.g. gym contract, recreational clubs and societies) and location of your personal belongings.
• Details of any return visits to South Africa, the frequency thereof and the reason for undertaking such visits.

 Qualifying basis 2: Cease by way of the physical presence test

• Only the standard requirements must be supplied

 Qualifying basis 3: Cease due to application of Double Tax Agreement (DTA)

• A certificate of tax residence from the foreign revenue authority or a letter from the authority that indicates your status as a tax resident in that country.

It is strongly recommend that tax compliance officers have the information and documents at hand when the tax return is submitted. Taxpayer’s are only afforded 21 business days to respond and the certificate of residence from the foreign revenue authority will take longer than 21 business days to obtain.

The Mazars private client and global mobility team could be engaged to assist with reviewing of the documents and information, determining the client’s tax status and drafting the response to SARS. 

01/10/2021