Do I need a Foreign Tax Clearance Certificate?

A tax clearance certificate serves as a written confirmation from South African Reserve Bank (SARS) that at the date issued all the taxpayer’s tax affairs are in order. Government uses tax clearance certificates as a means of measuring how compliant both individuals and organisations are.

Recent changes to Exchange Control legislation now allow individuals to take up to R5 million out of South Africa each year under their investment allowance. This is broken down into a R4 million foreign investment allowance and a R1 million discretionary investment allowance. The R4 million foreign investment allowance requires a foreign tax clearance certificate issued by the SARS which is required by the South African Reserve Bank when facilitating the payment.

Getting your Tax clearance certificate can be quite a lengthy process and the average processing time can be anything between 10 and 21 working days. SARS can however amend any requirements or turnaround times without notification.

For all foreign exchange transactions out of South Africa a tax clearance certificate must be obtained from SARS. SARS does not charge for applying for the tax clearance certificate. It does involve going to SARS waiting in the queue and then going in to pick it up. We therefore suggest using the service of a 3rd party such as your accountant or tax practitioner. Depending on whose services you use it will cost anything from R900 to R2500.

As part of the range of services Currency Solutions offer our clients we can assist in obtaining the tax clearance certificate, as we deal directly with SARS. If you are interested in transferring money out of South Africa and need a tax clearance certificate Contact Us today.To read the full report or visit the Currency Solutions website.

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