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To Reside, or Not To Reside

25 June 2010   (0 Comments)
Posted by: Author: Steven Jones
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To Reside, or Not To Reside

Is "residency” for tax purposes impacted by a person’s citizenship status?

The following question was recently posed by one of our readers:
If the taxpayer has dual citizenship and has not declared his intention to emigrate, will his tax status change in South Africa? If so, will the taxpayer still be deemed as having disposed of his assets and be tax on the interest and dividends.?

To my knowledge the concept of "residency” for tax purposes is in no way impacted by the person’s citizenship status.For instance,there are many South African residents who are non-SA citizens living here on permanent residence permits, and there are also a number of South African citizens who also legitimately hold citizenship of another country ( virtue of foreign birth).

Residency for tax purposes, as far as individuals are concerned, is based in the main on the "ordinarily resident” test, taking into account factors such as where a taxpayer has their permanent place of residence, the country the taxpayer considers "home”, the country that a taxpayer is most likely to return to upon completion of their travels,etc.

However, taxpayers who do not meet the criteria for being "ordinarily resident” can also be regarded as South African residents if they are physically present in South Africa for a specified number of days (the so-called "physical presence test”).The thresholds are:present in South Africa for more than 91 days during the current tax year; present for more than 91 days in each of the previous five tax years; and present for more than a total of 915 days during the previous five tax years.

Companies are "resident” if they are incorporated, established,formed, or have their place of effective management in South Africa.

Source: By Steven Jones (Tax breaks)


Section 240A of the Tax Administration Act, 2011 (as amended) requires that all tax practitioners register with a recognized controlling body before 1 July 2013. It is a criminal offense to not register with both a recognized controlling body and SARS.


The Act requires that a minimum academic and practical requirments be set to register with a controlling body. Click here for the minimum requirements of SAIT.

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