Africa-Press – South-Africa. Tax experts have noted that the South African Revenue Service (SARS) is increasing its focus on high-earning South African expats.
Imagine being a South African expatriate earning a high salary overseas, with housing, vehicles, and other generous benefits included in your package.
Then, SARS sends you a letter demanding months of payslips, payroll reconciliations, proof of foreign taxes paid, travel dates, and even the duration of every international trip you’ve taken.
According to Tanya Tosen, Master Mobility Specialist at Tax Consulting South Africa, this is no longer unusual.
Speaking at the 5th Global Mobility Conference in Johannesburg, she said audits targeting expatriates are becoming increasingly detailed and aggressive.
“SARS has asked employers for 12 months of payslips for expat staff, especially where benefits like housing and company cars are involved,” Tosen explained.
“And they make it clear that even more documents can be requested at any stage.” Tosen added that SARS sees expatriates as a lucrative source of revenue.
Their packages are often far higher than local salaries, sometimes ten times more, and the complex nature of cross-border tax structures makes them prime targets.
“SARS is not pulling punches,” she said. “The potential recovery is too high to ignore.”
On a global level, expat salaries average between $75,000 (R1.3 million) and $80,000 (R1.41 million) a year, with Switzerland and the US among the highest-paying destinations.
Finance, ICT, and engineering lead the pack for lucrative packages. For SARS, these numbers highlight why South Africans abroad are being monitored so closely.
However, audits are not just a problem for individuals. Employers also carry major responsibility. “Expatriate tax compliance is a core employer duty,” said Tosen.
“Companies are accountable for accurate payroll reporting, tax compliance, and related payments.” Getting it wrong not only leads to financial penalties but can damage an organisation’s reputation.
SARS is linking up with foreign tax authorities
One of the most common mistakes is misunderstanding tax residency. Many South Africans believe leaving the country permanently or on long-term assignment automatically severs their tax ties.
“That is not the case. If you haven’t formally ceased your tax residency with SARS, your worldwide income may still be taxed in South Africa,” Tosen warned.
Even when residency status is properly managed, cross-border income brings added complications. Double Taxation Agreements and foreign tax credits need to be applied correctly to avoid over- or underpayment.
“Many employers misinterpret the rules. Incorrect withholding or reporting is common when expats earn across multiple jurisdictions,” said Tosen.
Fringe benefits are another area of concern. Housing, schooling, relocation expenses, flights home, and company vehicles are often under-reported or omitted from payroll.
“These are easy revenue recovery points for SARS. Even minor payroll errors or incorrect valuations can result in big shortfalls, penalties, and interest,” Tosen explained.
She added that SARS can audit as far back as it wants if it suspects underreporting or misclassification.
The scale of the global expat market makes this a growing issue. More than 300 million people currently live outside their birth countries, about 3.6% of the world’s population.
By 2035, this number is expected to rise to 350 million. The US hosts the most expats (about 51 million), while the UAE has the largest proportion, with 88% of its residents being foreign-born.
Portugal and Mexico are currently the fastest-growing expat destinations, driven by digital nomad visas, Golden Visa programmes, and relatively low living costs.
Tosen noted that more than half of all expats are employees or professionals. Migrants and refugees account for 18%, retirees 7%, with the remainder made up of dependents, lifestyle movers, and long-term travellers.
The structure of expat work is also shifting. “Long-term postings of two to five years are on the decline,” Tosen said. “Companies want more flexibility and cost control.”
Instead, short-term assignments of three to 12 months are rising, as well as permanent transfers to fill skills gaps at a lower cost.
Commuter assignments, where employees live in one country but work across borders, are growing in regions like the EU and Gulf states. Virtual assignments, where digital nomads work remotely from anywhere, are also expanding rapidly.
SARS is linking data with the Department of Home Affairs and foreign tax authorities, making it harder than ever to slip through the cracks. “The era of full expat compliance has arrived,” Tosen said. “Non-compliance is no longer an option.”
She urged companies to act early by investing in proper payroll systems, accurate tax residency assessments, and specialist advice.
“Employers who act strategically will protect themselves from penalties and reputational damage,” she said.
For More News And Analysis About South-Africa Follow Africa-Press
