Frustration over tax clearance for foreign allowances
17 April 2015
Posted by: Author: Ingé Lamprecht
Author: Ingé Lamprecht (Moneyweb)
Despite exchange control relaxation, nothing has changed, says industry.
Although exchange controls were relaxed earlier this month, some industry players say Sars’ procedures still leave them in the same position they were before: that is they get tax clearance on amounts up to R4 million – within a few days – but are referred for audit where amounts exceed R4 million.
In the February Budget Review, National Treasury indicated that South African residents’ (individuals only) foreign capital allowance would increase from R4 million to R10 million per calendar year from April 1 this year.
This created the expectation among several industry players and applicants that tax clearance for the increased amount could be obtained in the same fairly quick fashion, as was the case for the R4 million limit. Taxpayers need a tax clearance certificate to convert their rands to foreign currency.
Moneyweb understands that tax clearance certificates were issued within two to seven days for applications up to R4 million.
Where larger amounts were involved (South Africans could externalise amounts in excess of R4 million before April 1) a tax audit was done and it could take several months to obtain a tax compliance letter.
However, a number of industry players say the current Sars process effectively leaves them in the same position they were before April 1 – when an application for more than R4 million is made, the application is referred for audit.
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This article first appeared on moneyweb.co.za.