Tax Clearances For International Transfers 

The April 2023 announcement by SARS certainly caused some reaction in the financial advisory community and the wider press at large. Some factual, some misleading and some scaremongering. Below we look at the impact of the new process and some of its implications.

What happened?

SARS introduced a new enhanced Tax Compliance Status (TCS) application process to facilitate the consolidation of the Foreign Investment Allowance (FIA) and Emigration TCS applications. Therefore, instead of two processes, they have now been combined into a single application known as “Approval of International Transfer” (AIT). 


  • The changes come from SARS, and not the South African Reserve bank. We have seen some media commentary from industry players stating that this is “tightening of exchange control regulations” and it is important to stress that these are not changes to exchange control, which is the responsibility of the South African Reserve Bank, but rather stricter oversight from SARS. 
  • The South African Revenue Service has stated for a long time that it will be tightening the monitoring and oversight of wealthy and high net worth South Africans.  SARS has also long stated that it seeks to ensure all who should pay tax do pay tax, and the amount of tax they pay is in line with what they should be paying. The new SARS requirements can be seen as part of this movement with a ‘beefed up' process for those sending large sums abroad. We talk about these new requirements below.
  • The result of the new process is very clear - it will become more difficult to transact in the future if your tax affairs are not up to date. The transfer of money out of South Africa will, with the new process, not be restricted to the individual’s direct holdings but also include the compliance monitoring of the tax affairs of all connected organisations – for example: companies that are fully or partly owned, as well as trusts of which the applicant is a beneficiary or trustee.

When did it take effect?

It became effective immediately on 24 April 2023.

Points to note:

  • Residents can still transfer up to ZAR 1,000,000 per year without any form of tax clearance.
  • SARS has for a long time been intrinsically involved in transfers over ZAR 1,000,000 - nothing has changed in this respect other than a tightening up on the process.
  • Applications have now been streamlined into the one process - Approval of International Transfer.
  • The first important question to be considered is whether the individual making the transfer abroad is whether the individual is resident or non-resident - the two are treated very differently.
  • Some further information is now required, mainly:
    • Are you a beneficiary of a trust (local or foreign)?
    • Do you have a shareholding directly/indirectly in any legal entity (local or foreign) of 20% or more?
    • Do you have any existing loan(s) to a trust (local or foreign)?

What we can make of the changes

The new AIT process can be put into context from both a local and international prospective. The following points are worth noting:

Tax compliance, FICA and Common Reporting Standards - Greylisting

  • FICA - We are all aware of the need to FICA an entity or individual. Long gone are the days where money could be hidden through invisible entities, false names and numbered accounts - FICA is all about getting to the identity of the ultimate beneficial owner. 
  • CRS - CRS refers to the automatic exchange of information and came into being in 2014. See for a refresher if needed. The aim of CRS is designed to prevent offshore tax evasion. It gives participating countries transparency on the financial assets held offshore by their residents. CRS requires financial institutions to identify customer tax residencies and report financial accounts held directly or indirectly by foreign tax residents to local tax authorities. In certain cases, this also extends to so called “controlling persons”- the (deemed) ultimate beneficial owners. CRS also requires tax authorities in participating countries (of which South Africa is one) to exchange this information.
  • Greylisting - It can also be viewed that in light of South Africa’s greylisting, and the need to improve disclosures around the ultimate beneficial owner (UBO’s) of structures, there is an increased requirement in terms of disclosures.

Taking all of the above into account, it becomes very obvious that those who do not comply with tax laws are seeing the net tightening around them - both locally and internationally.

Other impacted areas - inheritances where beneficiaries are based overseas.

The new AIT process has also seen changes with regards to foreign beneficiaries of late estates (individuals that are inheriting from a South African estate).

In 2021, the concept of financial emigration ceased to exist. This caused some amount of confusion and misunderstanding within the South African expatriate community concerning the exchange control requirements when receiving a South African inheritance while residing abroad.

Exchange control, which defines the boundaries for foreign exchange transactions by authorised dealers, now exclusively refers to "individuals who cease to be residents for tax purposes."

Therefore, it is now of paramount importance that an individual's tax status is established when receiving a South African inheritance and transferring funds from South Africa. It is this tax status that helps to ensure that authorised dealers remain compliant with South African exchange control laws.

South Africans, who live abroad, often have family members still in South Africa, from whom they are expecting to inherit. The process of transferring this inheritance overseas frequently poses a substantial challenge for these South African beneficiaries.

Typical scenarios for inheritances to be transferred abroad

1. You are classified as a South African resident temporarily abroad

A South African temporarily abroad is classified by the South African Reserve Bank as an individual who did not complete the formal emigration process before 1st March 2021, when it ceased to exist. As such you will be classed as temporarily abroad and be subject to the same exchange control regulations as individuals living in South Africa. 

This means that you can transfer your funds using your R1 million discretionary allowance (SDA) or your R10 million foreign investment allowance (FIA). The FIA requires an AIT (tax clearance) and your green barcoded South African ID book or ID card. We are able to assist you with obtaining the tax clearance certificate as well as getting a market leading exchange rate.

2. You have financially emigrated from South Africa (pre-March 2021) and are a non-resident of South Africa

The inheritance can be transferred to you subject to:

You will need to demonstrate proof that you financially emigrated by means of providing the South African Reserve Bank with your reference number (also called the ECA number) which you would have received at the time of your emigration. If this is not available then confirmation will need to be obtained.

3. You have never been a South African citizen

This should mean the transfer can be done quite easily as long as you can provide proof of your non residency status.

Where it can become complicated is when the tax status is unknown, such as individuals that hold a South African ID but left as a minor and have no tax number, as well as similar, less common situations.

In reality, there is no one size fits all solution. Factors that need to be considered include:

  • Tax residency status of the individual inheriting.
  • Whether the individual inheriting has a South African ID or not.
  • Whether the individual inheriting has ever been tax registered in SA and/or has tax emigrated officially.
  • The amount the individual is inheriting.
  • Whether a SARB approval needs to be sought.
  • If the individual inheriting has the intention to relocate permanently and meets the qualifying criteria to become non tax resident.


For taxpayers who comply with the law, there is nothing to fear (albeit slightly more paperwork). As far as a tightening of exchange control regulations, this is simply not true - it’s more a case of SARS not letting you transfer funds out of South Africa unless you are a tax payer of good standing and not hiding assets from authorities. 


If you need more guidance on the specific process for obtaining the new AIT or have any other queries around transferring funds out of South Africa, get in touch via our contact page, online chat or call + 27 (0) 21 424 2936.