Key updates to resident and non-resident status on eFiling
During 2025, the South African Revenue Service (“SARS”) announced further updates to the Registration, Amendments and Verification 01 (“RAV01”) form, alongside revisions to the ITR12.
A brief recap: ceasing South African tax residency
When a person ceases to be a South African tax resident during any year of assessment, they are treated as having disposed of all worldwide assets on the day immediately before residency ceases, at an amount equal to the market value of each asset on that date. These assets are then deemed to have been reacquired on the same day at the same market value.
In essence, the cessation of South African tax residency triggers an ‘exit charge’ under section 9H(2) of the Income Tax Act No 58 of 1962 (“the Act”), based on the market value of worldwide assets held at that point.
Certain assets are excluded from this deemed disposal, including:
- Fixed property held personally in South Africa
- Currency (domestic or offshore)
- Personal-use assets
- Retirement funds
- Unvested equity instruments as contemplated in section 8C of the Act
This results in a deemed capital gains tax event at a maximum effective rate of 18%.
From a practical perspective, SARS must be notified when a taxpayer ceases South African tax residency by amending the RAV01 form on eFiling. When an individual’s status is changed to ‘non-resident’, SARS requires detailed supporting documentation, including a motivation explaining why tax residency has ceased and on what basis. SARS then evaluates the case and issues confirmation of ‘non-resident’ status effective from a specified date.
Further SARS changes affecting non-residents
During 2025, SARS released a modified ITR12 tax return for non-residents, designed to simplify reporting by disclosing only South African sourced income. This return can be activated via the SARS Online Query System (“SOQS”), allowing non-residents to request access to the relevant section.
SARS has indicated that a permanent solution is being developed to make non-resident returns directly accessible. Importantly, the non-resident return can only be requested once official confirmation of non-resident status has been obtained from SARS.
A brief recap: triggering South African tax residency
Where South African tax residency is triggered, paragraph 12 of the Eighth Schedule to the Act treats a person as having disposed of worldwide assets at market value and immediately reacquired them at the same value.
This provides a ‘step-up’ in base cost to market value, other than South African immovable property and assets of a permanent establishment in South Africa.
Paragraph 24 of the Eighth Schedule contains rules that may limit the stepped-up base cost in certain cases to prevent artificial losses on future disposals.
Recent SARS changes affecting returning residents
Where a previously non-resident individual returns to South Africa permanently, they must now indicate the specific date on which South African tax residency was reinstated on the RAV01 form.
SARS may use this information to request further clarification, potentially trigger an audit, and verify whether exit tax was correctly declared and paid. SARS may also assess whether the re-entry into South Africa is justified based on the facts.
Key takeaway
The recent RAV01 and eFiling updates streamline SARS’ verification of tax residency and align legislative tax consequences with compliance obligations. Accurate recording of residency status and submission of proper supporting documentation is essential to ensure compliance and avoid disputes.