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 however excluded from this deemed disposal, including, inter alia:
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. Specifically, when an individual’s status is changed to ‘non-resident’, SARS requires a detailed list of supporting information and documentation, including a motivation explaining why South African tax residency has been ceased and on what basis. This allows SARS to evaluate the case and issue a confirmation of ‘non-resident’ status with effect 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 non-resident return can be activated via the SARS Online Query System (“SOQS”), which allows non-residents to request access to the non-resident section of the return.
SARS has indicated that a permanent solution is being developed to make non-resident returns directly accessible to simplify the process of declaring only South African sourced income. Importantly however, the non-resident return can only be requested if official confirmation of non-resident status from SARS has been acquired.
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 their worldwide assets for amounts equal to the market value of those respective assets and to have immediately reacquired those assets at a cost equal to the market value.
This means that a person who becomes a South African tax resident will receive a ‘step-up’ in base cost for assets to market value, other than South African immovable property and assets of a permanent establishment in South Africa.
It is however important to bear in mind that paragraph 24 of the Eighth Schedule to the Act contains rules which may limit the ‘stepped up’ base cost in certain cases to prevent artificial losses in respect of future disposals.
Recent SARS changes affecting returning residents
Where a person, who was previously a non-resident, returns to South Africa on a permanent basis, they will now be required to indicate the specific date on which their South African tax residency was reinstated on the RAV01 form.
SARS may then use this information to ask follow-up questions, potentially trigger an audit and verify whether ‘exit tax’ was previously declared and paid correctly. SARS may also use this declaration to determine whether the re-entry into South Africa could be justified based on the facts.
Key takeaway
The recent RAV01 and eFiling changes streamline SARS’ verification of tax residency, linking legislative tax consequences with compliance and reporting obligations. Accurate recording of residency status and submission of the correct supporting documentation is therefore essential to ensure compliance and avoid potential disputes.