South African Tax Residency

Is Tax Residency Like Parking a Car in a Garage?

If a car is parked in your garage, does that make you the owner?
No? Sometimes? Yes?
As any seasoned driver knows, ownership isn't just about location.

South African Tax Residency

The same logic applies to tax residency.

It's not simply about where you're physically "parked", but about your deeper connections to that place. And when it comes to tax, those connections matter a lot!

Let’s drive this home before you drive off with assumptions.

South Africa has a residence-based tax system.

If you’re a South African tax resident, SARS can tax your worldwide income, no matter where you earn it. And here’s where many get confused: Citizenship and tax residency differ. You could be both a citizen and a resident, or just one of the two. Let’s shift gear into the specifics:

How do you become a South African tax resident?

• By being an ordinary resident (South Africa is your home base, where your lifestyle, habits, and long-term intentions lie),

• Or through the physical presence test (based on how many days you spend in SA).

Can you have dual tax residency?
Yes, you can have tax residency in more than one country.
But if there’s a Double Taxation Agreement (DTA) between the two countries, a set of tie-breaker rules will determine which country gets the exclusive taxing rights, much like a tax residency custody battle (this is not a coin toss).

How do you cease to be a tax resident?

• If you’re an ordinarily resident, you must prove a factual change in your intention, backed by objective evidence. SARS can’t read your mind, but your lifestyle choices usually speak for themselves.

• If your status is based on the physical presence test, you must remain outside South Africa for 330 days.

Bonus fact:


Pets don’t have tax residency. AI and robots? Still under review.

And here comes the speed bump:
Breaking South African tax residency triggers a “deemed disposal” of your worldwide assets for capital gains tax purposes — better known as Exit Tax. Side note: Even in a 4x4, hit this one fast, and you’ll still feel it tomorrow.

• Do you know your tax residency status?


• Have you broken tax residency with South Africa but haven’t dealt with the consequences?


• Have you notified SARS?

We’ll continue down this road in upcoming posts. But for now, remember:
Parking your car outside the garage doesn’t get you out of ownership, and it definitely won’t get you out of tax residency.

Need help?

Let's talk

Werner Pauw

Director