SARS has introduced an enhanced compliance system change in relation to the current tax clearance status (TCS) required for the transfer of funds by a taxpayer intending to make use of their foreign investment allowance (FIA) of up to R10 million per calendar year. It has been noted the effective date of this change is 24 April 2023.

The enhanced changes to the TCS system require additional information on the approval of an International Transfer (AIT) Application, to aid SARS in ensuring that all required tax payable has been duly reported by the taxpayer. It is further noted that this would only apply for amounts in excess of R1 million. No TCS is required for transfers up to R1million per calendar year.

Supporting documents required for tax residents and non-tax resident applications
When making an application for foreign investment allowance for individual taxpayers, the following supporting documents must be submitted:

Evidentiary documentation for the source of the capital to be invested (as per each source criteria).
Statement of assets and liabilities for the previous 3 tax years (including disclosure of all investments; loan accounts; distributions from local and foreign companies and trusts).
Power of Attorney is required when the TCS application is submitted on behalf of the individual taxpayer.

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