Been abroad for five or 10 years? The tax questions that do not go away for South African expatriates

Been abroad for five or 10 years? The tax questions that do not go away for South African expatriates

Laura has been living abroad for almost a decade now. As far as she is concerned, South Africa is home in the past tense. But a recent night out with fellow South African expatriates left her perplexed when someone mentioned that the South African Revenue Service (Sars) could still tax her on her worldwide income.

She has built a life abroad, works there, earns her salary and pays tax there. Why then did her friends say she may still have to declare her foreign salary to Sars?

These are common questions. Many South Africans living overseas eventually find themselves asking them. And those who have not, may well need to – irrespective of whether they have been outside of South Africa for five, 10 or more years.

With the deadline for filing annual tax returns fast approaching on 23 October 2026, expatriates who are uncertain about their South African tax position should seek professional advice sooner rather than later.

Read: A new era of tax residency: Why the old approach no longer works

Why all the talk about tax residency status with Sars?

If Sars still regards you as a South African tax resident, you will be subject to South African tax on your worldwide income. This means that your foreign income remains declarable in South Africa and that your tax affairs may require review to ensure compliance.

If you have ceased to be a tax resident, you will generally only be taxed on South African-sourced income, such as rental income from property in South Africa.

This is an important distinction as many South Africans who relocated abroad never formally addressed their tax residency status when they left the country.

They established lives overseas and continued managing their affairs without considering whether their South African tax position had changed.

As more expatriates across popular expatriate destinations such as the United Kingdom, United Arab Emirates, Australia, Canada and China, recognise the importance of getting their tax affairs in order, they are proactively reviewing their South African tax residency status and ensuring that their Sars records accurately reflect their circumstances.

Read: Sars quietly fixes a big headache for South Africans who emigrate

Establishing your tax position is only the first step

Determining whether you remain a South African tax resident is an important starting point, but it is not the end of the story. If you remain tax resident in South Africa, various forms of tax relief may be available to reduce or eliminate South African tax on qualifying foreign income, depending on your circumstances and the applicable requirements.

It all comes down to the tax return submitted.

Regardless of whether any South African tax is ultimately payable, filing obligations remain an important part of maintaining compliance with Sars.

Many expatriates are surprised to learn that tax relief provisions do not remove the need to engage with Sars. Instead, they typically require the relevant disclosure through a tax return or a formal application process.

Read: Tax emigration and the importance of being pro-active

For South Africans expatriates, the appropriate approach to tax relief will depend on their tax residency status and their individual circumstances. The main options to consider are:

Irrespective of which tax relief option might best apply to your circumstances, all require a formal submission to Sars, in the form of a tax return, or application to cease tax residency.

Read: Sars crackdown targets expats moving money offshore Tax relief options can help South African expats protect their foreign-earned income

With the assistance of an experienced cross-border tax professional, it is rarely too late to correct past non-compliance and bring your affairs up to date.

Depending on the facts of each case, relief may be available through the Foreign Employment Income Exemption, a Double Taxation Agreement, or a backdated application to cease South African tax residency.

Taking the appropriate steps now can provide certainty, restore compliance and ensure that the most suitable tax relief option is applied.

John-Paul Fraser is the team lead for cross-border taxation at Tax Consulting SA, and Asamkele Tyala is an expatriate tax support specialist at Tax Consulting SA.

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Reported by moneyweb.co.za.

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