What leaving South Africa really means for your taxes and citizenship

Adopting foreign citizenship after leaving South Africa has drastic effects on a person’s financial affairs.

Tax specialists Colleen Kaufmann and Marisa Jacobs from Tax Consulting SA said that anyone who acquires citizenship in another country would automatically lose their South African citizenship.

With this, all rights and privileges associated with being a South African citizen, including losing one’s right to a South African passport, one’s right to vote and more.

The loss of key privileges is enshrined in South African law; however, it does not include someone who gains foreign citizenship through marriage and also does not apply to children.

According to the tax specialists, relinquishing your status as a citizen has no tax benefits, and you will be alienated from certain rights you may consider your heritage and not worth sacrificing.

Therefore when considering either moving their money abroad or physically relocating – South Africans must understand what citizenship means.

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A change in citizenship does not equate to permanent residency abroad, said Tax Consulting SA.

“Many South Africans emigrate under a host country’s permanent residence programme, requiring them to hold an appropriate visa throughout. They cannot apply for that jurisdiction’s passport and may typically be excluded from rights reserved for full citizens, like voting. Just moving to another country does not result in the loss of your South African citizenship.”

When you formally accept citizenship in another country, you can be issued a passport and enjoy all the benefits of being a citizen. But you will relinquish your South African citizenship by that act alone, said the experts.

South Africans who want to hang onto their homeland’s citizenship can apply for dual citizenship.

Section 6(2) of the Citizenship Act allows you to apply to the Minister of Home Affairs to retain your South African citizenship. This is provided you do so prior to losing it for accepting foreign citizenship.

If the minister deems it fit, they will order the retention of your citizenship, as shown in a certificate of exemption below, said Tax Consulting SA.

“Making this application a priority will allow you to enjoy the best of both nationalities.”

According to Tax Consulting SA, having two passports, often referred to as a “Plan B”, is for those not physically leaving South Africa but just keeping their wealth outside the country.

To reap the full benefits of tax emigration, it is often tempting to relinquish one’s citizenship; however, under South African law, a person is not freed from any obligation, duty or liability in respect of any act done or committed before they ceased to be a South African citizen, said the experts.

“This includes your tax obligations to SARS, which remain even after you become a foreign citizen until they are settled.”

Shown below is an example of a certificate of exemption:

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