The South African Revenue Service (SARS) appears to be taking an increasingly sophisticated and technically rigorous approach to applications by taxpayers who rely on Double Tax Agreements (DTAs) to cease South African tax residency before approving their change in tax residency status to that of non-resident.
Delano Abdoll
Legal Manager: Cross-Border Taxation
The South African Revenue Service (SARS) appears to be taking an increasingly sophisticated and technically rigorous approach to applications by taxpayers who rely on Double Tax Agreements (DTAs) to cease South African tax residency before approving their change in tax residency status to that of non-resident.
Delano Abdoll
Legal Manager Cross-Border Taxation
The practical implication is that for many South Africans living and working abroad, obtaining confirmation of non-resident tax status from SARS — often viewed as the final step in their tax emigration journey — may now require more technical accuracy and comprehensive supporting evidence.
This is the latest in a number of developments over the past 12 months indicating that SARS is moving beyond a simple review of departure dates and passport stamps and is placing far greater emphasis on whether taxpayers genuinely qualify for treaty relief under international tax law. If successfully applied, this results in their foreign sourced income no longer being subject to South African tax.
The First Warning Sign: June 2025
A significant but largely unnoticed development occurred during June 2025 when SARS began reflecting the qualifying basis upon which a taxpayer ceased South African tax residency on its Notices of Non-Resident Tax Status.
Previously, these notices typically reflected only the taxpayer’s personal details and the effective date of tax residency cessation.
The revised format now distinguishes between taxpayers who ceased residency under the ordinarily resident test, the physical presence test, or through the application of a Double Tax Agreement.
While seemingly administrative in nature, the change signalled a far more deliberate effort by SARS to track and categorise the legal basis upon which taxpayers claim non-resident status.
SARS Raises the Bar Again
Over the past year, tax practitioners have also observed a noticeable increase in requests for supporting documentation in DTA-based applications.
Taxpayers are increasingly being asked to provide:
These requests suggest that SARS is no longer content to rely solely on evidence that a taxpayer physically departed South Africa.
The Latest Development: It Is Not About When You Left
Perhaps the clearest indication yet of SARS’ evolving position can be found in recent correspondence issued in response to a non-resident verification application:
In rejecting the application, SARS stated:
“The date you ceased to be resident under a DTA is not simply the date you left South Africa, but the date you meet the DTA’s requirements for exclusive residence in the other country. Carefully consider the DTA’s tie-breaker rules and gather documentation to substantiate your position.“
This statement is significant.
It confirms that SARS is focusing not only on where a taxpayer lives, but also on when the legal requirements contained in the relevant treaty are actually satisfied.
In other words, departure from South Africa and treaty residence in another country are not necessarily the same event.
Why The Tie-Breaker Test Matters
Where a person is considered tax resident in both South Africa and another country under domestic law, the applicable DTA generally contains a tie-breaker mechanism designed to allocate exclusive residence to one jurisdiction.
Depending on the treaty involved, factors such as permanent home, centre of vital interests, habitual abode and nationality may need to be considered.
These tests are highly fact-dependent and often require detailed analysis.
A taxpayer may therefore leave South Africa on a particular date but only satisfy the treaty requirements for exclusive residence in another country several months later.
The difference can have substantial tax consequences.
A DTA Is Not a Once-Off Election
Perhaps the most misunderstood aspect of treaty residence is that a DTA-based non-residency position is not simply a once-off administrative election.
Where a taxpayer relies on a treaty to override South African domestic tax residency, the treaty outcome must continue to be supported by the underlying facts and circumstances.
Changes to family arrangements, accommodation, employment, economic interests or physical presence patterns can all potentially affect the treaty analysis in future years.
For this reason, taxpayers should view DTA residence as an ongoing legal position that must remain supportable over time rather than a permanent status achieved on the day SARS issues a confirmation letter.
What This Means for South Africans Abroad
The message emerging from SARS is increasingly clear.
The days of assuming that tax residency ends when the plane leaves South African soil are over.
As SARS continues to refine its approach to international tax compliance, taxpayers relying on DTAs should expect increased scrutiny, greater requests for supporting evidence and a stronger focus on the technical application of treaty provisions.
In an environment where SARS is looking beyond form and focusing on substance, taxpayers should ensure that their non-resident status is not only documented, but legally defensible under the relevant Double Tax Agreement.
