Guide to Tax Directive for Cease to be Resident – Layman Version

The South African Revenue Service (SARS) has made specific enhancements to its Tax Directives system to better handle the taxation of income for certain South African citizens. This update aims to provide clarity and certainty to taxpayers and make it easier for them to fulfill their tax obligations.

 

Understanding Tax Directives for South Africans with Local and Foreign Income

• • SARS continuously works to improve its digital platforms, ensuring they are safer and more secure, and that taxpayers can easily meet their obligations. As part of this commitment, a significant enhancement was introduced to the Tax Directives system on Friday, February 23, 2024.
  • What is this enhancement about? This specific enhancement focuses on the taxation of income earned from both South African (local) and international (foreign) sources.
  • Who does it apply to? It is designed to cater specifically to South African citizens who earned income both within South Africa and abroad during the same tax year. Crucially, this enhancement applies to those individuals who do not qualify for a specific tax exemption under Section 10(1)(o)(ii) of the Income Tax Act.
  • In simpler terms: If you are a South African citizen and you earned money both inside and outside South Africa in the same year, and you don’t meet the requirements for a particular tax break (Section 10(1)(o)(ii)), the SARS Tax Directives system has been updated to properly process your tax calculations.
  • What does this mean for the system? The update means that the SARS Tax Directives system is now equipped to handle these complex income scenarios, making it easier to determine the correct tax to be deducted from certain lump sums or benefits for these taxpayers.
  • Important Note: The provided sources detail system enhancements for Tax Directives and do not provide a comprehensive explanation of Section 10(1)(o)(ii) of the Income Tax Act itself, or a general authoritative legal position for all South Africans working abroad. The information specifically addresses how the SARS system will process cases for those who do not qualify for that particular section. For a full understanding of your tax obligations as a South African working abroad, you should consult the relevant tax legislation or a tax professional.