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Residency Status Of a Non-Resident Who Applies For a Temporary Residence Permit

Monday, 16 September 2013   (0 Comments)
Posted by: Author: Danielle Botha
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Author: Danielle Botha (CliffeDekkerHofmeyr)

On 30 August 2013 the South African Revenue Service (SARS) issued Binding Private Ruling 153, which dealt with the residency status of a non-resident natural person who intends applying for a temporary residence permit in South Africa.

The applicant was contemplating moving to South Africa as he had recently retired and had been spending extended periods of time in the country. The question posed was whether the granting of a retired person's permit (RPP) for temporary residence, would result in the applicant becoming ordinarily resident in South Africa for tax purposes.

The Department of Home Affairs prescribes that RPP's may be issued to persons who wish to retire in South Africa, provided that such persons comply with the financial requirements provided for in the Immigration Act, No 13 of 2002 (IA) and its regulations.

Section 20 of the IA requires that a person applying for an RPP must provide proof of a right to a pension or irrevocable annuity for the remainder of their life, as well as proof that the applicant has the minimum prescribed net worth.

In this instance, SARS ruled, on the assumption that the applicant is not a 'resident' for purposes of s1(1) of the Income Tax Act, No 58 of 1962, that an application for an RPP will not, in itself, be sufficient for the applicant to become ordinarily resident in South Africa. This was made subject to the applicant not indicating an intention to the Department of Home Affairs to settle in South Africa on a permanent basis.

According to the IA, an RPP is valid for a period not exceeding four years and may subsequently be renewed one or more times.



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.

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