October 27, 2022

Private Clients

Nudge to apply for Foreign Tax Clearance for 2022

Nudge to apply for Foreign Tax Clearance for 2022

At the start of each new calendar year, South African residents may avail themselves of new annual allowances granted by the SARB under Exchange Control regulations. The 2022 allowances remain unchanged, and we’ve put together an overview of your annual allowances below:   

1. R1 million Single Discretionary Allowance (SDA)

South African citizens (residents/individuals) are permitted to use their annual Single Discretionary Allowance (SDA) of R1 million for any legal purpose, such as foreign payments to purchase property, invest offshore, make card purchases, and pay for travel expenses outside of South Africa and the CMA. The SDA is granted to individuals every calendar year (expiring on 31 December) and does not require foreign tax clearance from SARS.

2. R10 million Foreign Investment Allowance (FIA)   

In addition to your SDA, individuals can also make use of a Foreign Investment Allowance (FIA) of up to R10 million per calendar year. The same rules and regulations apply, the only difference being that your FIA requires a Tax Compliance Status (TCS) pin from SARS. This entails an application with SARS, requiring “proof of source and availability” of funds. Once your application has been approved, your SARS TCS pin in terms of FIA is valid for 12 months from date of issue and you can draw down on it as often as you like.

3. Special Approval Applications

Furthermore, it is possible to externalise amounts greater than the combined value of your SDA and FIA allowances (R11 million per calendar year), by making a special approval application to the SARB. To submit your application to the SARB, you must first apply for TCS approval from SARS. It should be noted that there is no limit to the value that can be applied for, no restriction on the number of applications that can be made in this regard and there is no longer any exit levy or penalty payable in respect of such transactions.

If you are considering a currency transfer to invest offshore, purchase a property, or simply want to send your hard-earned savings abroad, you can still do so by using the balance of your 2022 annual allowances before year-end.

Applying for your SARS approval now, means you have everything ready and in place to transact quickly, so you don’t miss out on a favourable market rate.   

Currency Partners will handle all the complexities of obtaining your SARS approval, as well as any exchange control matters and applications as a complimentary benefit of our service.

Furthermore, by giving you access to the best pricing and service available in the market, we add value to your individual requirements and make your money go further. Keeping an eye on the markets, so you don’t have to, we make sure that you never miss out on a favourable exchange rate. And with our ‘better price promise’ you can always be assured of saving with Currency Partners.

If you are not an existing client, please register via the following link so that we may assist you in utilising your annual allowances, while saving you money on your exchange rates.

If you are an existing client, call +27 21 203 0081 or email clientservices@currencypartners.co.za for more information and assistance.

Did you know?

  • A SARS TCS pin is valid for 12 months from date of issue, so you can apply now and draw down on the balance over the next 12 months.

  • You do not need to redeem your investments and have the “cash reflecting” to apply for SARS approval – we can apply using your portfolio statements, so you remain invested and let your money keep working for you.

We look forward to hearing from you and saving you money on the exchange rates.