SARS Closes in on Non-Compliant South African Expats

South African expats, take note: the South African Revenue Service (SARS) is stepping up its efforts to track down non-compliant taxpayers abroad. With global data-sharing agreements and advanced technology, SARS can now easily identify individuals who have under-declared income or failed to formally end their South African tax residency.

The days of “out of sight, out of mind” are over. Living overseas no longer shields you from SARS’s reach.

The Core Misconception: Worldwide Income

The biggest trap for expats is misunderstanding tax residency.

👉 Unless you have formally ended your South African tax residency through SARS’s official process, you are still considered a tax resident.

That means you must declare your worldwide income - not just what you earn in South Africa. This includes:

• Foreign salaries and consulting fees

• Dividends and interest

• Rental income (local or abroad)

• Capital gains

Many expats mistakenly declare only their South African income, assuming that’s enough. Unfortunately, this is classified as under-declaring income - a serious compliance issue that can lead to penalties and even prosecution.

Penalties and Interest

Non-compliance is not a shortcut - it’s a financial risk.

SARS has the power to:

• Impose penalties of up to 150% of unpaid tax

• Charge interest that compounds over time

• Issue backdated tax bills going back several years

• Pursue criminal charges for intentional tax evasion (under Section 234 of the Tax Administration Act)

  
  

The cost of fixing mistakes later is always higher than getting it right from the start.

How SARS Knows More Than You Think 🌍

Common risky behaviours among expats include:

• Assuming that working overseas means you don’t need to declare foreign earnings

• Declaring only small amounts of South African income (like bank interest)

• Filing a “zero income” return and hoping SARS ignores it

These strategies no longer work. Through the Common Reporting Standard (CRS) and other international agreements, SARS receives detailed financial data from around the world, including:

• Foreign bank accounts

• Property ownership records

• Investment and retirement fund information

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Using advanced analytics, SARS cross-checks this data against your tax return. Their dedicated Foreign Employment Income Unit is actively monitoring expats - especially high earners.

Formal Non-Residency: The Only Safe Route

If you’ve permanently relocated abroad, the only way to stop SARS from taxing your worldwide income is to formally end your South African tax residency.

Once approved, SARS issues a Non-Resident Tax Status Confirmation Letter. This ensures:

• You are only taxed on South African-sourced income

• You avoid the risk of double taxation

• You gain certainty and peace of mind

The Bottom Line

SARS is more connected, more sophisticated, and more determined than ever. Ignoring your obligations is no longer an option.

✅ The good news: with the right steps, you can protect yourself. Whether that means declaring worldwide income correctly or applying for non-residency, acting now will save you stress, penalties, and unnecessary costs later.

Don’t wait for SARS to find you - take control of your tax status today.