South African Non-Resident Taxation: Key Obligations

Published on October 1, 2025 and written by Cyril Jarnias

South Africa, a dynamic and diverse economy, offers numerous opportunities for international investors and entrepreneurs seeking to expand their operations. However, one of the crucial considerations for non-residents is taxation, an aspect often complex and constantly evolving.

Understanding the filing obligations related to South African taxation becomes essential for anyone wishing to operate in the country without legal issues. This article explores the specific tax rules that apply to non-residents, highlighting the challenges and strategies for complying with local requirements while optimizing tax commitments.

Taxation for Non-Resident Expatriates in South Africa

Tax Regime Applicable to Non-Resident Expatriates in South Africa

Tax non-residents in South Africa are only taxed on their South African-sourced income (e.g., salaries for local employment, rental income from properties located in South Africa, dividends from South African companies, capital gains on disposal of South African assets).

Foreign-sourced income is not taxable in South Africa for non-residents.

Type of Income	Taxable in South Africa for Non-Residents
Employment exercised in South Africa	Yes
Rental income from a property in South Africa	Yes
Dividends from a local company	Yes (subject to withholding tax)
Capital gain on local asset	Yes
Foreign-sourced income	No

Tax Residence Criteria According to South African Legislation

To determine non-resident status, South Africa primarily applies two tests:

• Ordinary residence test: A person is considered a resident if they ordinarily live in South Africa, even without being physically present there all year.
• Physical presence test: A person is a resident if they have stayed in South Africa for more than 91 days per year for five consecutive years, and more than 915 days in total during that period.

Losing tax resident status requires officially declaring the cessation of tax residence to the South African Revenue Service (SARS), via the non-residency declaration form, often accompanied by a tax residence certificate from the new country, proof of departure, and foreign employment contract.

Specific Filing Obligations for Non-Resident Expatriates

• Annual return to be filed if South African-sourced income is received.
• The main form is the IRP6/ITR12 return for individuals.
• Cessation of residence declaration is done via the RAV01 form and the specific cessation declaration.
• Filing deadlines vary, but the submission period generally runs from July to November for the previous tax year.
• Payment of tax due before the deadline set by SARS, under penalty of fines.

Examples of Tax Deductions and Credits Applicable to Non-Residents

• Non-residents can generally deduct:
  • Business expenses directly related to producing South African income.
  • Certain interest charges and financial costs related to assets located in South Africa.
  • Contributions to South African retirement funds (within specific limits).
• Tax credits for taxes paid abroad are only granted if the foreign income is taxable in South Africa (which is not the case for non-residents).

International Tax Treaties

South Africa has signed numerous bilateral tax treaties to avoid double taxation.

• These treaties can:
  • Assign the right to tax certain income to one of the two countries (e.g., salaries, pensions, dividends).
  • Provide for reduced withholding tax rates.
  • Allow for tax exemption or the application of a tax credit.
• The treaty between France and South Africa, for example, specifies the tax rules for salaries, pensions, dividends, interest, and capital gains.

Legal Implications and Penalties for Non-Compliance

• Late or omitted filing: Fines proportional to the amount due, fixed penalties, late payment interest.
• False declarations or concealment: Criminal penalties, tax adjustments, and even legal prosecution.
• SARS has extensive investigative powers and access to information through international agreements (automatic exchange of data).
• Voluntary disclosure is sometimes possible but remains subject to the tax authority’s discretion.

Key Takeaways:

Non-resident status must be formalized, taxation applies only to South African income, and any omission or error exposes one to severe penalties.

Filing Obligations for Non-Residents

Tax Obligations of Non-Residents in South Africa

Types of Taxes Applicable to Non-Residents

• Income Tax: Non-residents are taxed only on South African-sourced income, including salaries, pensions, annuities, and certain investment income. Rates range from 18% to 45% depending on the income amount.
• Withholding Taxes: Certain categories of income (dividends, interest, royalties) may be subject to withholding tax, often at reduced rates if a tax treaty applies.
• Other Taxes: Non-residents may be subject to VAT (if engaged in taxable activities), capital gains tax on assets located in South Africa, and specific levies depending on the nature of the income.

Type of Tax	Income Concerned	Rates/Modalities
Income Tax	Salaries, pensions, annuities	18% to 45%
Withholding Tax	Dividends, interest, royalties	Treaty or domestic rate
Capital Gains Tax	Disposal of South African assets	Based on asset nature
VAT	Taxable activities (registration threshold)	15% (standard rate)

Registration Process with Tax Authorities

• Registration: Non-residents must register with the South African Revenue Service (SARS) as soon as they receive taxable income in South Africa.
• Procedure:
  • Complete the tax registration form (IT77 for individuals, IT77C for companies).
  • Provide a copy of the passport, proof of foreign residence, and any document justifying the connection with the South African income source (employment contract, foreign tax residence certificate, etc.).
  • Registration must be completed within 21 days of starting the income-generating activity.

Filing Obligations

• Annual Returns: Non-residents must file an annual income tax return (ITR12 for individuals), generally between July and November for the tax year ending February 28/29.
• Periodic Returns: For certain income subject to withholding tax, specific returns may be required by the entity paying the income.
• Documents Required to Avoid Double Taxation:
  • Tax residence certificate from the country of origin.
  • Specific forms provided in tax treaties (e.g., DTA1 form).
  • Proof of taxes already paid abroad.

Mechanisms to Avoid Double Taxation

South Africa has concluded numerous tax treaties to avoid double taxation.

The taxpayer can benefit from a tax credit corresponding to the tax paid abroad, up to the limit of the South African tax due on that income.

It is essential to provide the required documents for the credit to be applied.

Penalties for Non-Compliance

• Late Registration: Fixed penalties and late payment interest.
• Omission or Late Filing: Progressive administrative fines based on the severity and duration of the failure.
• Failure to Pay: Daily calculated late payment interest, automatic surcharges.

Steps to Benefit from Relief or International Tax Agreements

• Request application of the tax treaty via the appropriate form and attach a residence certificate.
• Ensure the completeness of the file to avoid refusal or delayed processing.
• If necessary, seek assistance from a tax advisor or the international treaties service of the country of residence.

Key Takeaways
Non-residents must register quickly with SARS, file their returns on time, and provide all necessary documentation to avoid double taxation. Failure to comply with these obligations exposes them to financial penalties and difficulties in benefiting from treaty relief.

Guide to Double Taxation in South Africa

Definition of Double Taxation and Implications for Non-Residents

Double taxation refers to the situation where the same income, profit, or gain is subject to two taxes of the same nature in two different countries, typically the country of the income source and the taxpayer’s country of residence. For non-residents, this situation represents a major concern, as it can lead to an excessive tax burden and make certain cross-border investments or activities less attractive.

Measures Taken by South Africa to Avoid Double Taxation

South Africa has signed numerous international tax treaties (double taxation agreements) with various countries to prevent the same income from being taxed twice. These treaties assign the right to tax to a single state or, when both states can tax, provide for the granting of a tax credit in the state of residence.

Method	Principle
Exemption	Only one state taxes the income; the other exempts it entirely or for rate calculation.
Credit	Both states tax, but a tax credit is granted to avoid double charge.

Role of the South African Revenue Service (SARS)

The SARS is the South African tax administration responsible for implementing tax treaties, issuing tax residence certificates, auditing returns, and managing tax credit requests. It ensures that agreements are correctly applied and that non-residents benefit from the measures provided to avoid double taxation.

Foreign Tax Credits and Exemptions for Non-Residents

To mitigate the impact of double taxation, tax treaties generally provide for:

• Tax Credit: Tax paid abroad (e.g., in South Africa) is credited against the tax due in the country of residence, up to the limit of the tax due on that income.
• Exemption: Certain incomes may be fully exempt in one of the two states, according to the applicable treaty.

Income Amount	Tax Paid in South Africa	Tax Calculated in Country of Residence	Tax Credit Granted	Remaining Tax Due in Country of Residence
€10,000	€2,000	€2,500	€2,000	€500

Concrete Examples or Case Studies

• A French tax resident receives dividends from a South African company: the France-South Africa treaty provides that the tax withheld at source in South Africa is taken into account as a tax credit in France, thus avoiding double taxation on this income.
• A South African employee temporarily assigned to France will only be taxed in their country of residence (South Africa) if the duration of the stay in France does not exceed the limit provided by the treaty.

Consequences of Non-Compliance with Filing Obligations

Failure to comply with filing obligations, such as non-declaration of foreign income or failure to request a tax credit, can lead to:

• Loss of the benefits of tax treaties.
• Effective double taxation on the concerned income.
• Tax penalties (fines, late payment interest) imposed by SARS or the tax administration of the country of residence.

Practical Tips for Non-Residents

• Keep all supporting documents: Withholding tax certificates, tax attestations, proof of tax payment abroad.
• Accurately complete tax forms in each country, mentioning foreign-sourced income and attaching required documents.
• Request a tax residence certificate from SARS to benefit from treaty advantages.
• Inquire about the applicable treaty between South Africa and the country of residence.
• Consult a tax advisor specialized in international taxation in case of complex situations.

Key Takeaways:

Double taxation can be avoided through rigorous documentation, good knowledge of tax treaties, and compliance with filing obligations in each country.

Steps for Expatriate Tax Filing

Essential Steps for Expatriate Tax Filing in South Africa:

• Determine your tax residence status in South Africa, as this status determines the scope of taxable income (worldwide income for residents, South African-sourced income for non-residents).
• Notify the tax service of your country of origin of your change in tax residence, and provide your new foreign address.
• Contact the South African Revenue Service (SARS) to register as a taxpayer, if not already done.
• Gather all necessary documents for tax filing.

Documents to Prepare:

Document	Purpose
Proof of tax residence (certificate, visa…)	Justifies your status with tax authorities
Worldwide income statements	Required for tax residents, including salaries, dividends, property income, etc.
Withholding tax certificates	Prove taxes already paid abroad
Employment contract, employer attestations	Specify the nature and source of income
Bank statements	Justify financial flows
International tax treaties	To present in case of exemption or tax credit request

When and Where to File the Return:

• The tax filing period in South Africa generally runs from July to October for the previous tax year.
• Returns must be submitted to the South African Revenue Service (SARS).
• For non-residents, it may be necessary to also file in the country of origin, according to the applicable tax treaty.

Available Electronic Platforms:

The eFiling online portal of SARS allows for submitting returns, uploading supporting documents, and tracking the status of your file.

Online assistance (chat, FAQ, guides) and consultation services are available, particularly for non-residents or newcomers.

Deadlines and Consequences of Non-Compliance:

• Returns must be submitted before the deadline set each year by SARS (usually in October).
• In case of delay or omission, financial penalties and late payment interest are applied. In serious cases, legal action may be taken.

Tax Credits, Exemptions, and Tax Treaties:

• Expatriates can benefit from tax credits for taxes already paid abroad, provided they supply proof.
• Certain tax exemptions exist for non-residents, particularly on specific income (e.g., certain dividends).
• International tax treaties signed between South Africa and other countries allow for avoiding double taxation. It is crucial to present these treaties during filing and complete the corresponding forms to benefit from the advantages.

Assistance and Consultation:

Firms specialized in international taxation, as well as the SARS assistance service, can guide expatriates through the process.

Summary of Steps in List Form:

• Determine tax residence status.
• Inform the tax authorities of your country of origin.
• Register with SARS.
• Gather all supporting documents.
• Use the eFiling platform for declaration.
• Meet submission deadlines.
• Verify applicable tax credits and exemptions.
• Seek professional assistance if necessary.

Following these steps ensures compliance, optimizes taxation, and avoids any administrative or financial penalties.