Financial emigration is the process used by many South Africans abroad to formalise their non-resident status for both tax and exchange control purposes, and which is set to be amended, as mentioned a year ago in Budget 2020, and come into effect on 1 March 2021.

Since the initial announcement, there has been zero public consultation, draft Regulations or anything else publicly released, on exactly what the new process will look like. However, finally the South African Reserve Bank (SARB) has released its comments to authorised dealers on how the new regime will commence.  

With the new regime comes a host of positives and negatives. Positive is that the antiquated legislation around exchange control for the process is completely falling away, however on the other hand, the tax treatment of the process will be more stringent with a focus on tax residency only, potentially making it more onerous to overcome the burden of proving non-resident status.

Submitted by Tax Consulting SA