At IBN Immigration Solutions, we are often asked a deceptively simple question: “At what point do I become a South African tax resident?”
It is one of the most critical questions any foreign national, South African emigrant, or internationally mobile professional can ask. Your residency status determines whether South Africa taxes you only on your South African income, or on your entire worldwide income. And while the core tax rules have not changed dramatically in recent years, the interpretation, enforcement and practical application certainly have.
My aim in this guide, written from the perspective we apply daily in our advisory work, is to remove unnecessary confusion, bring clarity to a complex system, and help you understand precisely where you stand.
South Africa’s Tax System in One Sentence
South Africa uses a residence-based tax system
This means your passport does not determine your obligations, your employer’s location, or how many days you intend to stay, but instead by whether you are considered a tax resident.
- A tax resident is taxed on worldwide income
- A non-resident is taxed only on South African source income
Everything else flows from this single principle.
There Are Only Two Ways You Can Become a Tax Resident
The South African Revenue Service (SARS) uses two tests to determine your residency. These are applied in a strict sequence:
- The Ordinarily Resident Test – a holistic assessment of where your true home is.
- The Physical Presence Test – a mathematical day-count applied only if the first test is failed.
This hierarchy matters. Many people skip straight to day-counting, when in reality, SARS may already view them as residents because their lives are centred in South Africa.
Let’s look at each test in a practical, human way.
1. The Ordinarily Resident Test: Where Is Your Real Home?
This is the primary test and, in many cases, the most important one.
South African law draws on a long line of court decisions that ask: Where do you naturally and as a matter of course return after your wanderings?
In other words, where is your real, settled home?
SARS considers your entire life pattern, not simply one or two factors, which may include:
- Where is your permanent home?
- Where your spouse and minor children live.
- Where do you keep your personal belongings?
- Whether you have a settled lifestyle here.
- Your long-term intentions, not just your current location.
- Your business and economic ties.
- Community and social involvement.
This is a profoundly personal test. You cannot rely on a single action, such as buying a property or spending time abroad, to determine the outcome.
Example: Becoming Ordinarily Resident
A foreign national move to Cape Town with their family on a long-term assignment. They rent a house, enrol their children in school, bring personal belongings, and join local community networks. Even if they spend periods abroad for work, South Africa has effectively become their “real home”.
Example: Ceasing to Be Ordinarily Resident
A South African citizen permanently relocates to the Netherlands. They move their family, sell their South African home, establish a permanent lifestyle abroad, and obtain foreign tax residency. In that case, their centre of life has shifted, and they cease to be ordinarily resident from the day they left with that intention.
2. The Physical Presence Test – For Those Who Are Not Ordinarily Resident
If South Africa is not your real home, SARS applies the Physical Presence Test, a numerical assessment based solely on the time you spend in the country.
To become a tax resident through this test, you must meet all three of the following requirements:
| Requirement | Time Period | Threshold |
| 1 | Current tax year | More than 91 days physically in South Africa |
| 2 | Each of the previous 5 tax years | More than 91 days in each year |
| 3 | The same 5 preceding years | More than 915 days in total |
If you meet all three, you become a tax resident from the first day of the sixth year.
Clarifying the Day-Counting Rules
Over the past few years, SARS has become more precise and stricter about how days are counted:
- A day includes any part of a day
- The day of arrival and the day of departure both counts
- A day begins at 00:00, meaning even an 11:55 p.m. arrival counts as a full day
- Genuine transit through South Africa without entering the country does not count
How You Cease Residency Under This Test
If you are a resident only through physical presence, you cease being a resident when you are outside South Africa for 330 consecutive full days. On the 331st day, you are treated as having ceased residency from the day you left.
Crucial Note: This rule does not apply to those residents through the Ordinarily Resident Test, who cease only when their real home genuinely moves abroad.
3. Double Taxation Agreements: The “Tie-Breaker” That Changes Everything
Even if you satisfy either test, your residency may change entirely if a Double Taxation Agreement (DTA) applies between South Africa and another country.
A DTA may deem you exclusively resident in another country. If so, South Africa must step back and tax you only on South African source income.
This is a critical protection for globally mobile individuals, especially those who:
- are working abroad while still legally resident in South Africa,
- have homes in multiple countries,
- split their time frequently, or
- are undergoing formal financial emigration.
The DTA tie-breaker rules (permanent home \ centre of vital interests \habitual abode \ nationality \ mutual agreement) decide which country has primary taxing rights.
DTAs are among the most misunderstood yet most powerful tools available to manage your global tax exposure.
What Tax Residency Means in Practice
If you are a tax resident, South Africa may tax:
- Employment income earned anywhere in the world
- Investment and rental income from all jurisdictions
- Foreign business income
- Worldwide capital gains (with some exclusions)
However, residents working abroad may qualify for the Foreign Employment Exemption.
The Foreign Employment Exemption (Section 10(1)(o)(ii))
Many expatriates assume their foreign salary is automatically tax-free. It is not.
To qualify for the exemption, you must be:
- A South African tax resident
- An employee (not self-employed)
- Working outside South Africa for:
- at least 183 full days in any 12 months, of which
- At least 60 days must be continuous.
If these strict conditions are met, up to 1.25 million of foreign employment income may be exempt. Anything above that is taxable, unless a DTA applies.
Tracking your days is essential.
Even as a non-resident, you may still have South African tax obligations.
SARS can tax:
- Rental income from property in South Africa
- Income for services physically rendered in South Africa
- Certain pensions and annuities
- Capital gains on South African property
- Withholding tax on entertainers and sportspersons
Ceasing residency does not remove your footprint from SARS if you maintain South African assets.
Ceasing Tax Residency and the Often-Overlooked “Exit Tax”
When you cease to be a tax resident, South Africa triggers a deemed disposal (often called the exit tax) on most of your worldwide assets. This can create a capital gains tax liability in the year you leave.
Assets excluded from the exit charge include:
- South African immovable property,
- South African retirement funds
- assets linked to a permanent establishment in South Africa.
You are also required to notify SARS of your cessation of residency formally; merely leaving the country is not enough.
Who Should Pay Particular Attention?
In our experience, three groups are most at risk of inadvertent tax residency or unexpected tax liability:
- Foreign nationals building a life in South Africa: Your “real home” may shift to South Africa sooner than you expect, making you ordinarily resident.
- South Africans working abroad: You may remain tax resident despite years outside the country unless your ordinary residence has genuinely shifted or a DTA tie-breaker applies.
- Long-term visitors and digital nomads: Highly mobile foreigners often unknowingly meet the physical presence test.
At IBN, we see this repeatedly: uncertainty around tax residency leads to unnecessary costs, incorrect filings and substantial penalties, all of which are avoidable with proper guidance.
Our Approach at IBN Immigration Solutions
Immigration and tax residency are closely linked but rarely explained together.
My mission is to simplify the journey, remove barriers, and empower individuals to make informed decisions. We work closely with tax professionals to guide:
- corporates relocating staff to South Africa
- foreign investors establishing a local presence
- South Africans emigrating permanently
- families managing cross-border lives
Understanding your tax residency is foundational, as it informs your visa strategy, your relocation decisions, and your long-term financial planning.
Need Clarity About Your Tax Residency? We Can Help.
Each case is unique. No online calculator or directory can substitute for a proper assessment of your circumstances, intentions, travel patterns, and supporting documentation.
If you are:
- moving to South Africa
- planning to work abroad
- unsure whether you have ceased residency
- considering a long-term relocation
We would be happy to guide you through the practical implications and ensure that your immigration and tax strategies align.
Your journey should be clear, not costly or confusing.
Written by Andreas Krensel, Senior Director, Africa and Europe
