SARS is making it harder for South Africans to end their tax residency – even if they’ve already left the country

It is becoming harder for South Africans abroad to stop being South African taxpayers, as SARS increases scrutiny of tax emigration applications and demands stronger proof that taxpayers genuinely qualify as non-residents.

Tax Consulting South Africa’s legal manager of cross-border taxation, Delano Abdoll, explained that the South African Revenue Service (SARS) is becoming increasingly sophisticated and technically rigorous.

Now, SARS is eyeing applications from taxpayers who rely on Double Tax Agreements (DTAs) to cease South African tax residency before approving their change in tax residency status to non-resident.

Abdoll cautioned that this will have practical implications for many South Africans living and working abroad.

Obtaining confirmation of non-resident tax status from SARS is often viewed as the final step in a tax emigration journey, but it may now require more technical accuracy and comprehensive supporting evidence.

This is the latest in a number of developments over the past 12 months, indicating that SARS is moving beyond a simple review of departure dates and passport stamps.

The revenue service is now placing far greater emphasis on whether taxpayers genuinely qualify for treaty relief under international tax law.

If successfully applied, this means their foreign-sourced income is no longer subject to South African tax, Abdoll explained.

A major but largely unnoticed development occurred during June 2025 when SARS began reflecting the qualifying basis upon which a taxpayer ceased South African tax residency on its Notices of Non-Resident Tax Status.

Previously, these notices typically reflected only the taxpayer’s personal details and the effective date of the cessation of tax residency.

The revised format now distinguishes between taxpayers who ceased residency under the ordinarily resident test, the physical presence test, or under a DTA.

“While seemingly administrative in nature, the change signalled a far more deliberate effort by SARS to track and categorise the legal basis upon which taxpayers claim non-resident status,” Abdoll said.

It gets harder for taxpayers to comply – again

Over the past year, Abdoll said tax practitioners have also observed a noticeable increase in requests for supporting documentation in DTA-based applications. Taxpayers are increasingly being asked to provide:

• Tax residency certificates issued by foreign revenue authorities
• Detailed letters of motivation
• Employment and immigration documentation
• Evidence relating to accommodation arrangements
• Supporting information relevant to treaty tie-breaker tests

“These requests suggest that SARS is no longer content to rely solely on evidence that a taxpayer physically departed South Africa,” he said.

Perhaps the clearest indication yet of SARS’ evolving position can be found in recent correspondence issued in response to a non-resident verification application, which it rejected.

“The date you ceased to be resident under a DTA is not simply the date you left South Africa, but the date you meet the DTA’s requirements for exclusive residence in the other country,” SARS wrote.

“Carefully consider the DTA’s tie-breaker rules and gather documentation to substantiate your position.”

Abdoll stressed that this statement is significant. It confirms that SARS is focusing not only on where a taxpayer lives, but also on when the legal requirements under the relevant treaty are satisfied.

“In other words, departure from South Africa and treaty residence in another country are not necessarily the same event,” he said.

South Africans can no longer assume their tax residency

Abdoll explained that, where a person is considered tax resident in both South Africa and another country under domestic law, the applicable DTA generally contains a tie-breaker mechanism.

This tool is designed to allocate exclusive residence to one jurisdiction. Depending on the treaty involved, different factors may need to be considered.

These include factors such as permanent home, centre of vital interests, habitual abode, and nationality. These tests are highly fact-dependent and often require detailed analysis, Abdoll said.

“A taxpayer may therefore leave South Africa on a particular date, but only satisfy the treaty requirements for exclusive residence in another country several months later. The difference can have substantial tax consequences,” he said.

Perhaps the most misunderstood aspect of treaty residence, Abdoll said, is that a DTA-based non-residency position is not simply a once-off administrative election.

“Where a taxpayer relies on a treaty to override South African domestic tax residency, the treaty outcome must continue to be supported by the underlying facts and circumstances,” he said.

Changes to family arrangements, accommodation, employment, economic interests, or physical presence patterns can affect the treaty analysis in future years.

“For this reason, taxpayers should view DTA residence as an ongoing legal position that must remain supportable over time rather than a permanent status achieved on the day SARS issues a confirmation letter,” he said.

He stressed that the message emerging from SARS is increasingly clear. “The days of assuming that tax residency ends when the plane leaves South African soil are over,” he said.

As SARS continues to refine its approach to international tax compliance, taxpayers relying on DTAs should expect increased scrutiny.

They may face greater requests for supporting evidence and a stronger focus on the technical application of treaty provisions.

With SARS now looking beyond form and focusing on substance, Abdoll said taxpayers should ensure that their non-resident status is not only documented but also legally defensible under the relevant DTA.