Verdict on SA Retirement Fund Withdrawal

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On Tuesday 13 October in Parliament, National Treasury and SARS presented to the Standing Committeeon Finance on two major items for South Africans working abroad and/or South Africans planning to emigrate permanently.  This follows from the oral submissions presented by Tax Consulting SA and a handful of other tax firms on 7 October 2020. The two items in question:

  1. The withdrawal of retirement funds upon emigration; and
  2. Amending the 183/60 day rule to the foreign remuneration exemption (Section 10) in light of the Covid-19 travel ban.


Major takeaways from National Treasury and SARS’ submission:

  1. The proposed three-year “lock-up” of retirement funds upon emigration will remain in place and take effect from 1 March 2021.
  2. All complete applications received by the SARB before 1 March 2021 will be finalised through the existing process, provided that they are approved by the SARB (even if the approval should occur after 1 March 2021).
  3. The 183/60 day rule will effectively change to 117/60 days for the years of assessment ending from 29 February 2020 to 28 February 2021. This is a Covid-19 relief mechanism to help those stuck in RSA due to the travel ban.

Jean du Toit (Head of Tax Technical) and Jonty Leon (Legal Manager) from Tax Consulting SA who were present in the virtual sessions are available to comment hereon.

Please reach out if you are interested to set up an interview with one of our experts.

 

 

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