Where does your spouse live? Where are your personal belongings? Have you applied for permanent residence or citizenship abroad?

These are just some of the 17 probing questions the South African Revenue Service (“SARS”) is now asking South Africans living and working abroad who wish to obtain confirmation of their non-resident tax status – often viewed as the final step in their tax emigration journey.

Historically, taxpayers have focused on obtaining a foreign Tax Residency Certificate, updating their SARS records, and demonstrating that they have left South Africa.

Recent SARS correspondence, however, suggests that the process has become considerably more sophisticated.

In one verification process involving a taxpayer who relied on a Double Tax Agreement ("DTA") to support a non-residency position, SARS issued a detailed information request comprising a long list of separate questions aimed at testing whether the taxpayer genuinely qualified for treaty relief.

The questions provide a rare insight into how SARS is approaching DTA-based residency claims behind the scenes and may signal the direction of future verification processes.

Says Delano Abdoll, Legal Manager: Cross-Border Taxation at Tax Consulting South Africa:

"The significance of these questions is not necessarily the individual answers. What is noteworthy is that SARS appears to be conducting a comprehensive treaty residency analysis rather than simply reviewing whether a taxpayer has physically left South Africa. The questions mirror many of the factors contained in international treaty tie-breaker provisions."

What SARS Wants to Know

The questions posed by SARS extended far beyond the taxpayer's departure date.

Among other things, SARS sought information regarding:

• The taxpayer's intention when leaving South Africa;
• Their most fixed and settled place of residence;
• Their habitual abode and day-to-day lifestyle;
• The location of their business and personal interests;
• The location of their spouse and family's interests;
• Employment arrangements and contract terms;
• Banking relationships and financial interests;
• Immigration and residency status in the foreign country;
• The location of personal belongings;
• Social, cultural and community connections; and
• Whether permanent residence or citizenship had been sought abroad.

Viewed collectively, it is clear that SARS is not simply asking whether a taxpayer has relocated.

It is seeking to determine where the taxpayer's life is genuinely centred.

Why These Questions Matter

Many DTAs contain so-called "tie-breaker" provisions. These provisions apply where a person may simultaneously be regarded as tax resident in two countries under their respective domestic laws.

In such circumstances, the treaty must determine which country has the stronger claim to exclusive residence.

Depending on the treaty involved, factors such as permanent home, centre of vital interests, habitual abode and nationality may become relevant.

Significantly, many of SARS' questions appear to be directed precisely at these concepts.

The enquiry therefore goes far beyond a review of passport stamps or travel records. Instead, it seeks to establish the broader factual matrix required to apply the treaty correctly.

The End of the "I Have Left South Africa" Approach

A common misconception among expatriates is that tax residency automatically ends when they leave South Africa. While physical departure remains an important fact, it is only one part of the overall analysis.

A taxpayer may have relocated abroad but still maintain significant personal, economic or family connections to South Africa.

Conversely, another taxpayer may be able to demonstrate that the centre of their life has shifted decisively to another jurisdiction.

The difference lies in the facts.

The questions now being posed by SARS suggest that the revenue authority is increasingly focused on understanding those facts in detail.

A Consistent Trend Is Emerging

The 17-question verification request does not appear in isolation.

It follows several recent developments indicating increased scrutiny of DTA-based non-residency claims.

Over the past year, taxpayers have experienced growing requests for supporting documentation, increased focus on treaty tie-breaker provisions and greater scrutiny of the dates upon which treaty residence is said to arise.

Taken together, these developments suggest that SARS is moving towards a far more evidence-based approach to international tax residency disputes.

What South Africans Abroad Should Take from This

The message emerging from SARS is becoming increasingly clear.

Taxpayers relying on a DTA should expect SARS to look beyond departure dates and foreign tax certificates.

Instead, the focus appears to be shifting towards the underlying facts that demonstrate where a taxpayer's life, family, economic interests and long-term connections are genuinely located.

The most revealing aspect of the 17 questions is therefore not the questions themselves: it is what they tell us about SARS' approach.

For taxpayers claiming treaty non-residency, SARS is no longer merely asking whether they left South Africa.

It is asking whether the facts support the conclusion that they are truly resident somewhere else.

Written by Delano Abdoll, Legal Manager: Cross-Border Taxation at Tax Consulting SA