SARS prepares to target returning expats
South African expatriates returning home after years abroad are being caught off guard by tax queries from the SARS.
Many South Africans abroad eventually feel compelled to return home, whether to reunite with family, raise children in a familiar environment, or retire in their homeland.
However, tax experts caution that the South African Revenue Service (SARS) is closely monitoring these returnees’ tax affairs.
Many expats mistakenly believed that leaving the country automatically ended their tax obligations. However, this assumption is proving costly upon their return.
SARS takes note of returning citizens
Unless they formally terminate their South African tax residency, SARS may still regard expatriates as taxpayers, even after extended periods abroad.
Tax specialists Richan Schwellnus and Nicolas Botha from Tax Consulting SA warn that SARS is paying close attention to the tax affairs of returning citizens.
“Whether or not the formal financial emigration procedures were followed by returning expats, they need to prepare themselves for SARS to query their initial departure and their decision to return,” they said.
Data from Statistics South Africa indicates that since 2000, approximately 413,000 South Africans have emigrated, with just under 28,000 choosing to return.
RETURNING TO THE MOTHER LAND
A growing number of South Africans are choosing to come home, driven by social, economic, and personal reasons. This rising trend has not gone unnoticed by SARS, which is increasing its scrutiny of those repatriating.
Schwellnus and Botha report that SARS is confronting many expats with vaguely worded queries. These questions can create confusion and may lead to incorrect or incomplete responses, potentially triggering deeper investigations into their tax status and finances.
They added that it is common for expats to neglect their South African tax obligations after moving abroad, under the mistaken belief that SARS is no longer interested.
However, returning home often brings their tax status back into focus.
Failure to meet SARS’ compliance requirements can result in unexpected tax liabilities, penalties, or audits.
Returning expats are advised to proactively review their tax history before re-establishing residency.
review historical tax statuses
Checking whether their departure from South Africa was properly disclosed to SARS is a crucial first step. This applies whether they maintained their South African tax residency while abroad or formally ended it.
Those who ceased their tax residency face additional scrutiny, as SARS may question whether their initial declaration was accurate and whether they truly intended to remain abroad permanently.
To ensure a smooth transition back into the local tax system, Schwellnus and Botha recommend that expats seek guidance from specialist tax advisors.
“These professionals can help navigate SARS compliance checks, mitigate audit risks, and safeguard offshore investments,” they said.
They added that careful planning before returning home can simplify the process and protect hard-earned assets. This will ensure that expats enjoy a stress-free reintegration into South Africa.