SARB tightens excon requirements with tax clearance certificates for non-residents

South Africa’s latest exchange control rule changes will have significant consequences for non-residents investors.

The South African Reserve Bank’s Financial Surveillance Department quietly updated the Exchange Control Manual, fundamentally altering how non-resident remitted funds abroad. The result:

• Higher compliance costs, and

• Longer delays in accessing income,

  
  

At a time when South Africa is trying to reposition itself as a reliable, investment friendly destination for global capital, these changes send troubling signals.

What Changed? AIT Tax Clearance Certificate Requirements Expanded to Income

Historically, non-residents only needed an Approved International Transfer (AIT) tax clearance certificate status PIN from SARS when transferring capital out of South Africa. Income — dividends, rentals, trust income, and similar flows — could be remitted without tax clearance.

The new rules now require AIT tax clearance certificates for several income categories, including:

• Dividends, profits, and distributions

• Directors' fees

• Trust income

• Rental income

Other types of income — such as interest, pensions, annuities, salaries, and service fees — remain exempt.

This inconsistency has raised immediate concern among tax practitioners.

“There is no rational basis for requiring an AIT for dividends but not for interest,” says Michael Kransdorff, Director of the Institute for International Tax and Finance.“This arbitrary distinction will only confuse and frustrate foreign investors.”

Non-Residents Face Heavier Compliance Than Residents

One of the most problematic aspects is that non-residents do not benefit from the R1 million annual single discretionary allowance available to residents.

This means even small amounts of income will require an AIT application.

Non-residents, who are not registered with SARS, can not escape the requirements. They are required to obtain a manual letter of compliance – international transfer from SARS.

Both processes require extensive documentation, including:

• Proof of non-residency

• Detailed source-of-funds information

• Recent bank statements

• Three-year statement of assets and liabilities

SARS officially has up to 21 business days to process an AIT — but in practice, delays are common. Many investors may wait weeks or months before being able to access their own income.

Conclusion

South Africa cannot afford to send mixed signals. The country should be making it easier, not harder, for global investors to participate in its markets.

Unless these changes are reconsidered, they risk deepening the decline in foreign investment, reducing liquidity on the JSE, and undermining confidence in South Africa’s financial system.

The Institute for International Tax and Finance will continue to monitor developments and engage policymakers on behalf of affected investors.