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Rykes waai in hul hordes: ‘Wurggreep van geldreëls’ dwing hulle uit SA

Rykes waai in hul hordes: ‘Wurggreep van geldreëls’ dwing hulle uit SA

Source: Rapport Deur Pieter-Louis Myburgh Sondag 05 Oktober 2014 3:07 nm.

Ryk Suid-Afrikaners emigreer in hul hordes omdat hulle vertroue in die land se ekonomie verloor het.

Voorts is Suid-Afrika se “ar­gaïese” valutabeheerstelsel, wat veronderstel is om te verhinder dat te veel geld die land verlaat, ’n groot rede vir dié valuta-uittog.

Rapport het met drie finansiële praktisyns gepraat wat mense met hul geldsake help wanneer hulle emigreer of geld in die buiteland wil belê.

Al drie sê al hoe meer welvarende en hoogs opgeleide Suid-Afrikaners neem hul geld en vaardighede na die buiteland.

Dit kom nadat die Suid-Afrikaanse internet-miljardêr en ruimtereisiger Mark Shuttleworth die afgelope week ’n geskiedkundige sege teen die Suid-Afrikaanse Reserwebank in die appèlhof behaal het.

Die bank is beveel om die R250 miljoen wat Shuttleworth in 2001 onder protes moes betaal om sy fortuin van meer as R4 miljard na die buiteland te skuif, aan hom terug te betaal.

Shuttleworth het aangekondig hy gaan die geld in ’n trust belê om ander Suid-Afrikaners by te staan wat die regering oor grondwetlike kwessies in die howe wil pak.

“Miljarde der miljarde rande verlaat tans die land saam met welvarende Suid-Afrikaners wat emigreer,” sê Michael Honiball van die regsfirma Webber Wentzel se belastingafdeling.

Die presiese bedrae wat die land verlaat, is onbekend en die Reserwebank wou nie dié besonderhede aan Rapport beskikbaar stel nie.

“Kragtens art. 33 van die Suid-Afrikaanse Reserwebank-wet kan die Reserwebank nie hierdie inligting deel nie,” het Hlengani Mathebula, die bank se woordvoerder, in sy reaksie per e-pos geskryf.

Honiball sê dit is baie kommerwekkend om te sien in watter getalle welvarende Suid-Afrikaners die land verlaat.

“Dit is mense wat werk hier skep, ons het hulle nodig. Maar die wurggreep van (ekonomiese) regulasies waarmee ons hier moet worstel, dwing hulle om oorsee te gaan sake doen,” sê Honiball.

Hy kry veral te doen met plaaslike entrepreneurs wat hul maatskappye soms vir honderde miljoene rande verkoop en dan met hul fortuin na die buiteland trek.

Ryno Viljoen, stigter van die maatskappy Cashkows, sê hy kry nou tot 150 aansoeke elke maand van mense wat die land wil verlaat.

“Dit is skrikwekkend,” sê ­Viljoen. Hy hanteer kliënte wie se bates enigiets tussen R20 000 en R200 miljoen beloop.

Volgens Viljoen voel welvarende Suid-Afrikaners genoop om die land te verlaat omdat daar onsekerheid is oor kwessies soos eiendom- en grondregte.

“Dit het vir hulle meer sin om hul kapitaal na die buiteland te skuif,” sê Viljoen.

Hy is skepties oor die uitwerking van veldtogte wat Suid-Afrikaners in die buiteland aanmoedig om terug te kom.

“Uit my eie ervaring kan ek sê daar is baie min mense wat terugkom,” sê Viljoen.

Hugo van Zyl, ’n belastingpraktisyn wat in internasionale transaksies spesialiseer, sê net die pensioene van sy kliënte wat reeds oorsee is, beloop elke maand R9 miljoen.

Hy sê die Reserwebank se streng reëls oor intellektuele ­eiendom, waarvolgens Suid-Afrikaners nie patente in die buiteland kan registreer nie, dryf baie innoverende individue landuit.

“Hulle gaan doen hul navorsing oorsee in plekke soos Silicon Valley (in die VSA),” sê Van Zyl.

Honiball sê Suid-Afrika skiet homself in die voet met sy ar­gaïese valutabeheerstelsel.

“Dink logies daaroor. Watter land ter wêreld laat jou nie toe om jou eie geld landuit te neem soos jy dit goeddink nie?

“Alle lande het in ’n mindere of meerdere mate valutabeheer, maar Suid-Afrika is die laaste land ter wêreld wat só streng is,” meen Honiball.

 

FATCA in Afrikaans? BRS:AEOI? Is this Marmite on Toast you ask?

BRS: AEOImeans Business Requirement Specification: Automatic Exchange of Information

There is so many new tax acronyms, one can’t be blamed for not always knowing  the full phrase behind the tax acronym.

To guide you, we add a few new once, all from an SA perspective yet they are all well-known international acronyms or abbreviations.

Here they are, but it is not an exhaustive list:

  1. AEOI – Automatic Exchange of Information aka AEFAI as per SARS press release on BRS
  2. AEFAI – Automatic Exchange of Financial Account Information
  3. ATO – Australian Tax Office www.ato.gov.au
  4. BRS – Business   Requirement   Specification or Direct Data Flow Channel Guide  aka SARS Modernised 3rd Party Reporting platform, used to report inter alia PAYE, VAT, Investment Income (IT3’s).
  5. CRA – Canadian Revenue Authority – http://www.cra-arc.gc.ca/menu-eng.html
  6. eFile – the South African online tax filing portal www.sarsefiling.co.za
  7. Excon – Exchange Control aka FinSurv- SA monetary laws administered by SARB
  8. FATCA – Foreign Account Tax Compliance Act – FFI and other tax offices dotted over the word reports on you to the IRS. An USA Act see http://www.irs.gov/Businesses/Corporations/Foreign-Account-Tax-Compliance-Act-FATCA
  9. FBAR – Report on Foreign Bank Account reporting – you tell IRS
  10. FFI – foreign (non-USA) financial institutions – FATCA terminology compare with USFI or FI that is USA based
  11. FinSurv – Financial Surveillance, previously known as Control or SARB’s Exchange Control watchdog
  12. HMRC – Her Majesty’s Revenue & Customs – UK tax office http://www.hmrc.gov.uk/
  13. IGA – Model 1 and Model 2 intergovernmental agreements (IGA) or FATCA agreement between IRS and SA on the AEOI process using the BRS designed and implemented in the various IGA jurisdictions
  14. IRD – Inland Revenue – New Zealand aka Maori as Te Tari Taake
  15. IRS – Inland Revenue Services in the USA www.irs.gov
  16. MTP (SA) – Master Tax Practitioner in SA – the Who’s Who in SA tax environment 
  17. PR – Tax practitioner registered with SARS
  18. SARB – South African Reserve Bank, equivalent to the Central Bank in international terms www.resbank.co.za
  19. SARS – South African Revenue Service – www.sars.gov.za
  20. TAA – Tax Administration Act – South African Act dealing with C:SARS rights to administer tax acts
  21. USFI – U.S. financial institutions the internal US hold Co aka as lead FI reporting for all FFI’s in the FI Group

OK, you still lost? Need some more info on all the buzz words and your compliance risk and obligation? Feel free to ask the questions:

“PROJECT DO IT” MAY BE YOUR COME OUT OF JAIL CARD FOR SA EXPATS IN AUSTRALIA

hugovz@iafrica.com

hugovz@iafrica.com

DO IT BEFORE 19/12/2014 = FORMALLY EMIGRATE NOW AND WRAP UP YOUR SA TRUST SOONEST

IT’S A MATTER OF TIME SA TRUST BENEFICIARIES LIVING IN AUSTRALIA WILL BE HARSHLY TREATED AS TAX CHEATS WARNS THE ATO.

The ATO (the Australian Taxation Office) recently announced and published significant PROJECT DO IT information on the tax amnesty for foreign assets held in own or trust / entity name.

As of 1 March 2014, South Africans can now emigrate or exit their SA private company to be owned directly below an Australian trust or even better below an Australian Hold Co, either owned by an Australian trust or in certain cases as a subsidiary of a self managed Super.

More detail can be found on the more recent blog – just follow the link

Hugo may not advise on the Australian structure yet can ensure the trust is properly dissolved (where advisable and legal). I am Hugo van Zylquite willing to run this past the various families and what is important to IRM’s is that most South Africans in Australia incorrectly reported in SA and Australia i.e. they may need to do a VDP (voluntary disclosure or amnesty like) application in South Africa before or simultaneously with the ATO’s project DO IT.

Where there is a tax refund in SA, VDP will not be applicable as VDP is only where there is a tax due on revision or update.

Feel free to contact me should have questions.

See Me On TaxConnections

Debugging theNew Zealand tax amnesty on Foreign Superannuation Funds from South Africa

Debugging the IRD tax amnesty on Foreign Superannuation Funds from South Africa.

Synopsis for quick reading

The foreign investment fund (FIF) rules which intended to tax interests in foreign investments on an annual basis, was generally ignored by most immigrants. As of 1 April 2014 FIF and other complicated rules will no longer apply to interests in foreign superannuation

  •  South African Pension Funds as well as Retirement Annuity       Funds qualify as foreign Supers

·   IRD (the NZ version of the South African SARS) rules in respect of foreign lump sums are changing on 1 April 2014

·         Due to the changes NZ Government announced an amnesty that ends on April 1st yet, they have effectively extended this deadline to include all applications (o withdraw from the Super) were filed prior to 1 April 2014 provided the encashment date / entitlement or accrual is reported no later than in the 2014-15, i.e. lump sum must be encashed by 31 March 2015.

·         If you elect the amnesty only 15% of the lump sum is taxed and for the highest earners,  the effective tax rate is 5% on the lump sum, which is far less than the SA taxes withheld at source;

·         SA taxes qualify for a tax credit in NZ – effectively the amnesty will cap your IRD tax at the taxes paid to SARS on encashment

·         You can leave the funds in ZA Rand and transfer when, and if the exchange rate improves. No need to convert and send to NZ to qualify for the amnesty

·         If you elect not to use the amnesty, you need do nothing until you cash in, as there is no longer an annual IRD tax on unrealised FIF growth

·         You need not transfer to a Kiwi Saver but if you did,  you can withdraw  the IRD taxes from the Kiwi Saver

·         SA expats living in NZ for less than 4 years can continue to enjoy the “transitional resident rules” which provides for a 4-year exemption on SA lump sum and other income from SA sources.

·         As a general guideline, you need to be in NZ more than 7 years before the 15% amnesty inclusion rate is beneficial. On 7 years the effective tax rate is less than 5% whereas in the 8the year the effective rate jumps to near 7%. But this is not the only test to be done. If SARS taxed you at an effective rate of 25% (near R1.4m RA lump sum) then amnesty is probably not worth it until you reach your 18th taxed year in NZ i.e. 22 years of stay  (NZD 155 555 x 75.17 x 33.33% tax = NZD 38 973 which equals 25.05%). The minute any one of the monetary issues change the number of years could be substantially less.  For smaller amounts the number of years reduces substantially

·      Expressed differently: the new IRD foreign lump sum regime is so favourable, no SA expat living in NZ should could use the fear for additional IRD tax an excuse to delay claiming ownership of their cash bag trapped in SA RA fund.

 In short, it is time to speak to us. Ensure you consider the true facts, make the right decision and to ensure the magical 4 year tax exemption opportunity is not missed, and if you have been in NZ for more than 48 months consider the benefits of the amnesty and send that request to encash your SA RA or pension fund,   before 1 April 2014. Still unsure how to go about? Provide us with the necessary mandate and we can kick-start the process on your behalf, alternatively for a small fee we provide you with the template letter to be sent.

 

 

Ex-pat Pensioners enjoy Exchange Control Freedom

On our Exchange Control Blog we posted an interesting Exchange Control update (Circular 4 of 2014) refers. See http://wp.me/P4efR1-q

In short:

Ex-pat Pensioners residing abroad (not having formally emigrated) can now extract their monthly pension and retirement annuity income from South Africa (SA) without the need of a tax clearance certificate, despite living abroad as so called temporary non-residents.

TAX ISSUES

UK resident ex-pat pensioners must take note of their NDR status and the tax consequences of remitting SA pension to the UK.

UK, USA, Australia and New Zealand ex pat pensioners may need to avail to treaty benefits to extract their pensions tax free from SA.

Should you need help complete the section below and we will be in contact.

USA bank account? Be afraid, be very afraid

See Me On TaxConnections

For many years, whenever offshore tax avoidance issues are discussed, many South Africans suggested that having a bank account in Delaware or with any USA bank was rather safe from prying eyes. The USA was not tainted as a tax haven despite the Delaware arrangements.
A recent USA court ruling, slapping a USA bank on the fingers for trying to escape the IRS reporting requirements, makes for interesting reading.
This is the IRS way of thanking SARS for entering into signing the FATCA agreement negotiations.
BIG DADDY IS WATCHING – not even your Google account was safe from IRS/USA government. What made you think your USA bank account was safe?
Department of Justice Seal - Department of Justice Action Center
Department of Justice
Office of Public Affairs
FOR IMMEDIATE RELEASE
Monday, January 13, 2014
Court Rejects Banking Associations’ Challenge to
Regulations Addressing Offshore Tax Avoidance

Today the District Court in the District of Columbia dismissed a challenge filed by the Florida Bankers Association and Texas Bankers Association challenging 2012 amendments to the Department of the Treasury’s interest-reporting regulations.  The regulations require U.S. banks to report to the Internal Revenue Service (IRS) information about accounts earning more than $10 of interest beginning in 2013 that are held by non-resident aliens of all countries with which the United States has a tax treaty or other information exchange agreement [Blogger adds: South Africa is included in this list!].  These new reporting requirements help the United States’ ability to comply with requests from its treaty and exchange partners and implement the Foreign Account Tax Compliance Act.

“This ruling advances the Department of Justice’s and Internal Revenue Service’s continuing efforts to pursue taxpayers trying to evade taxes through offshore accounts,” said Assistant Attorney General Kathryn Keneally of the Tax Division.  “The court’s opinion today represents an important step in our commitment to work with our treaty partners to eliminate cross-border tax evasion.” 

The court upheld the regulations’ 2012 amendments, finding that the IRS “reasonably concluded that the regulations will improve U.S. tax compliance, deter foreign and domestic tax evasion, impose a minimal reporting burden on banks, and not cause any rational actor – other than a tax evader – to withdraw his funds from U.S. accounts.”

The court’s decision affirms the IRS’ ongoing efforts to close the tax gap through cooperative measures with foreign governments, including the  2012 amendments. 

14-042                            Tax Division

 

Ryno Viljoen, CEO at Cashkows.com says:

Friendly advice for all South Africans abroad,  and/or planning to move overseas. Please feel free to share this with your family and friends.http://www.cashkows.com/retirement-annuity-surrender.asp

Early Retirement Annuity Surrender & Planning |

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