Global Mobility Tax

South Africa | Cessation and reinstatement of tax residence

Summary

In March 2021, SARS introduced a formal “Declaration of Cease to be a Tax Resident” process whereby South African taxpayers who are looking to formally cease their tax residency must submit a formal application to SARS. In July 2025, SARS have now also introduced a new mechanism whereby taxpayers are required to notify SARS where their tax residency is reinstated.

The detail

Cessation of South African tax residence

South African expatriates who have emigrated and no longer meet the tax residency criteria must formally notify SARS to cease their tax residency status. SARS has strengthened its administrative processes in recent years and failure to comply could result in ongoing tax obligations and penalties.

The application process

Taxpayers who wish to notify SARS of their cessation of residence must update their registered details on SARS e-filing on their RAV01 form. This will trigger a request for supporting documentation by SARS which typically includes:

• A signed copy of the SARS “Cessation of Residency Declaration Form”
• A detailed motivational letter outlining the facts and circumstances of the cessation application
• Passport copies including exit stamps confirming date of departure from South Africa
• Proof of address in the foreign country
• A copy of the taxpayer’s work permit or visa in the foreign country
• A tax residency certificate from the foreign country’s tax authority

Once the application is submitted, SARS will review the documentation and if satisfied, issue a formal “notice of non-residency status” confirmation letter.

Who is affected?

The process applies to South African taxpayers who:

• Have ceased to be ordinarily tax resident of South Africa
• Are deemed to be exclusively tax resident of a foreign country under the applicable Double Taxation Agreement (“DTA”) between South Africa and the other country
• No longer meet the tax residency day requirements under the Physical Presence Test

What are the tax implications?

It is important to note that the cessation of tax residence triggers a so-called “CGT exit charge” whereby taxpayers are deemed to dispose of their worldwide assets (with exceptions) for capital gains tax purposes. Taxpayers with significant share portfolio’s, unit trust accounts or foreign property should obtain professional advice when ceasing tax residency as it could have a very significant impact on their taxes to be paid in the year of cessation.

Reinstatement of South African tax residence

In July 2025, SARS introduced a new mechanism whereby South African taxpayers who are returning to South Africa are required to formally notify SARS of their reinstatement of tax residence. This will need to be completed by taxpayers who previously formalised their cessation of residency with SARS either through financial emigration (prior to 1 March 2021) or through the above-mentioned cessation of residence application process. This forms part of SARS’s broader drive to improve transparency and compliance in a globally mobile environment.

The reinstatement of South African tax residence may have significant tax implications including:

• Taxation on worldwide income and gains
• Obligations by taxpayers to disclose offshore assets
• SARS re-evaluation of your residency position based on the specific residency criteria

South African expats must be aware that both ceasing and re-establishing South African tax residency now both require formal notification to SARS. To avoid non-compliance or unexpected tax liabilities or penalties, taxpayers are strongly advised to seek professional tax advice before leaving or returning to South Africa.

Contact us

For a deeper discussion on the above, please reach out to your Vialto Partners point of contact, or alternatively:

Kesiree Mari
Director – South Africa

Craig Willson
Manager – South Africa

 

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