The South African Revenue Service (SARS) has recently introduced new reporting requirements for international transactions, including the transfer of funds abroad. This change is aimed at increasing transparency and accountability in cross-border transactions and ensuring that individuals and businesses comply with tax regulations. SARS requires a "immigration" TCS pin or a "foreign investment allowance" ("FIA") TCS pin before transferring funds. The former applies to those sending money from South Africa after their South African tax residency ends. The latter will apply in all other cases involving remittances from South Africa
SARS has also increased its scrutiny and enforcement of cross-border transactions, including the transfer of funds abroad. SARS now requires individuals and businesses to provide detailed information about the nature and purpose of the transaction, as well as the parties involved. Failure to comply with these requirements can result in penalties and legal action by SARS. Additionally, SARS has strengthened its defences against transfer pricing and other mechanisms used to shift taxable income out of South Africa. These measures have made it more challenging for individuals and businesses to transfer funds abroad without proper documentation and compliance with tax regulations.
The impact of SARS' measures on individuals and businesses transferring funds abroad has been significant. The new reporting requirements and increased scrutiny have led to longer processing times for international transactions and increased administrative burdens for individuals and businesses. However, these measures have also contributed to greater transparency and accountability in cross-border transactions, which is essential for maintaining the integrity of the tax system. As such, individuals and businesses must ensure that they comply with SARS' requirements when transferring funds abroad to avoid penalties and legal action.
Call your tax practitioner for advice before you need one of our specialised tax law attorneys to defend legal action against you.
Source: 1. Opt out of the sale or sharing of personal information. (n.d.) Retrieved May 8, 2023, from www.news24.com 2. Media release – How SARS has changed tax compliance status reporting for transferring funds abroad. (n.d.) Retrieved May 8, 2023, from www.sars.gov.za 3. SARS changes to Foreign Investment Allowance process - RockWealth Capital. (n.d.) Retrieved May 8, 2023, from rockwealth.co.za/foreign-investment-allowance-changes/
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9 May 2023