SARS changes to Foreign Investment Allowance process

We wanted to bring to your attention some important updates regarding SARS’s amendments to the emigration process and the Foreign Investment Allowance changes, as explained by Thomas Lobban, Head of Cross-Border Tax at aTax Consulting SA to News24.

On 24 April 2023, SARS released new enhancements to the Tax Compliance Status (TCS) process with immediate effect. These changes will affect specific taxpayers seeking to transfer funds out of South Africa, and will effectively change the game for those who have ceased tax residency in the country.
One of the key changes is the introduction of an “Approval for International Transfer” (AIT) Pin, which replaces the previously required “Emigration” and “Foreign Investment Allowance” (FIA) Pins. While this simplifies the process from one perspective, the extent of information and documentation required by SARS is far more involved and extensive.
Taxpayers must now disclose both their local and foreign assets and liabilities to SARS, with every single asset listed allocated a value and subject to further verification by SARS. It is also worth noting that a new requirement is a request for the sources where the value arose from, which is subject to SARS verification and must be carefully selected.
These changes indicate that SARS has a particular focus on the wealth of taxpayers, locally and abroad, and the basic standard of living for those seeking to financially emigrate or transfer their wealth offshore. Therefore, taxpayers are cautioned to measure twice and cut once in terms of the disclosures made to SARS for the AIT Pin. It is recommended that these applications be proactively addressed by a qualified tax practitioner or attorney.