South African expats face new tax compliance rules for money transfers

In a significant regulatory shift, the South African Revenue Service (SARS) in conjunction with the South African Reserve Bank (SARB) have announced new measures that affect South Africans living and working abroad. Starting this month, individuals wishing to transfer funds out of the country will be required to demonstrate tax compliance and correct marking of their shares.

This comes after the two institutions implemented procedural shifts at the end of October 2025 that reinforce South Africa’s long-standing capital control framework.

This is according to Michelle Phillips, senior Attorney: exchange control and SARS engagement, and Micaela Paschini, Team Lead: Tax Legal at Tax Consulting South Africa, who said that non-resident shareholders should begin the clearance process early to avoid delays.

"This means offshore transfers will now be blocked unless both SARS and SARB requirements are satisfied, in the precise sequence required by law. The message for former South Africans is clear: you may have emigrated years ago, but unless your documentation aligns with the new regime, your funds may not leave South Africa".

According to the new rules, non-resident shareholders must obtain the appropriate SARS clearance, either an AIT PIN if still registered or a Manual Letter of Compliance if no longer registered, before their bank can release dividends or other South African-sourced income.

Under the new SARB rules, former SA tax residents can send up to R10 million a year abroad, but only if they are tax‑compliant and have a SARS AIT PIN or a Manual Letter of Compliance.

"The above requirement extends well beyond dividends. It also applies to other South African-sourced income, such as rental income and director’s fees".

"It remains uncertain whether SARS will issue a once-off MLC or whether a new clearance will be required per transaction. Different banks may also interpret the requirements differently"

They added that non-resident shareholders should regularly check their SARS and bank records, and ensure all documentation is up to date.

"The risk is simple: your dividends or other income may sit in South Africa indefinitely unless both compliance legs are satisfied. With SARS’s December closure period fast approaching, any delays in lodging applications for clearance could result in funds being trapped until well into the new year".

"Non-resident shareholders expecting year-end dividends should begin the clearance process immediately to avoid missing the window for offshore transfer".

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