Africa-Press – South-Africa. Anyone moving or returning to South Africa must obtain a tax number to work, invest, or access financial services, but the process can be complex and time-consuming.
Tax Consulting SA’s SARS Compliance Specialist, Chrispos Seete, explained that South African law requires any person who becomes liable for tax to register as a taxpayer with the South African Revenue Service (SARS).
This includes all types of South African tax liabilities, such as income tax, VAT, and Capital Gains Tax. This registration process provides the applicant with a tax number.
This number represents a unique identifier used by the revenue service to track and manage tax obligations and compliance.
“This applies to South African residents and foreigners who do business in South Africa, and there is no getting around it,” Seete said.
Without a tax number, a person’s ability to work, invest, run a business, or access financial services in South Africa is limited.
“A tax number is more than just a number; it is your key to participating fully in the country’s financial and economic ecosystem.”
For foreign individuals, obtaining a tax number is typically one of the first administrative steps after settling immigration or travel documents, Seete explained.
“But with SARS now discouraging walk-ins at its branches and shifting to digital and appointment-based processes, this step can quickly become complicated and time-consuming.”
A major obstacle, Seete explained, is that SARS does not accept foreign contact details during tax number registration.
“Consequently, many foreign nationals who do not have South African contact details are unable to complete the registration process independently while still abroad.”
“To save time and avoid frustration, many individuals eventually turn to online sources and AI tools to assist with this process, but they will be better off engaging with a tax specialist who has experience in this field.”
Common misconceptions and struggles
“Another misconception arises when individuals believe they are registered for a tax number, only to have a tax expert discover later that they have merely created an eFiling profile with no tax number linked to it,” Seete said.
This leaves those wishing to come to South Africa unable to demonstrate compliance or access essential services.
Another challenge arises from Section 20(1) of the Tax Administration Act (TAA), which stipulates that every taxpayer is entitled to only one tax number.
“This can become a common pitfall for South African expats,” Seete said. “After years abroad, many assume they no longer have a tax number if they were inactive on SARS’ platforms.”
“They are unaware of the fact that the first tax number, linked to their South African ID, is still the only tax number needed. However, many inadvertently register a new tax number using their passport details.”
He explained that this can create duplication issues, which are not easily fixed if the person is not familiar with SARS systems.
“The correct approach is to reactivate and correctly link the existing tax number through SARS-approved procedures. This is best handled by professionals.”
Seete said that often, the challenge is not that a tax number does not exist, but rather a problem with its status or visibility:
Inactive tax numbers: Usually due to an individual, whether foreign or a South African citizen, not being active in submitting returns for several years. This may be because of unemployment, relocation abroad, or economic inactivity.
Deregistered tax numbers: SARS may deregister the tax number when a taxpayer shows no activity for an extended period.
Incorrectly linked on the SARS system: A tax number may exist, but may not be linked correctly on an individual’s eFiling profile.
Individuals struggling to make the move
“Due to these challenges, many individuals find themselves in administrative limbo, unable to register, retrieve, or access their Notice of Registration,” Seete said.
He explained that these issues commonly arise for South African expats and foreign individuals wishing to access an inheritance held in South Africa.
For example, this could be someone who left the country at a young age to study abroad and now requires a tax number in order to release or administer an inheritance held in the country.
Those who previously worked in South Africa and now need to encash matured policies or investment products for transfer abroad may also struggle.
Similarly, those wishing to invest in the South African economy – such as individuals looking to invest in a local business, acquire shares, or contribute to investment funds – also often face these issues.
Seete added that foreigners buying a holiday home or rental property in South Africa also commonly run into difficulties.
They must take note that SARS requires them to be registered for tax before a transfer can take place, as this will ensure that transfer duty is correctly processed.
The final group who often faces challenges, Seete said, is those relocating to South Africa for work. Crucially, these individuals must obtain a tax number before commencing employment.
He stressed that proper tax registration, particularly for foreign individuals and South African expats, requires more than just submitting documents.
The process often involves gathering the required supporting documentation, including ID or passport details, and conducting checks to identify any existing SARS linkages. This ensures that the correct tax number is reactivated if it exists.
The process also involves facilitating communication with SARS to ensure registration is completed accurately and efficiently.
“With the right guidance and understanding of SARS’ requirements and procedures, navigating the tax number process does not have to be stressful,” Seete said.
“Leave it up to experienced tax practitioners to take the complexity off your plate, ensuring peace of mind with registering for a tax number and ensuring it is linked correctly.”
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