Can I be a tax resident in two countries?

This question seems to have a long and complex answer and in order to understand it, you need to understand how the South African tax rules apply for foreign citizens and businesses. In short though, the answer to the question is yes, you can be a tax resident in two countries, but only if you meet the correct conditions.

Now that we have that out of the way, let’s explore what tax residency is and how you can go about applying for dual tax residency. If you’d like to skip this learning process though, let us handle all the nitty-gritties for you; get in touch with us today to learn more!

What is tax residency?

Tax residency means that you can live, work, and do business in a foreign country. A tax resident is normally allowed to benefit from the privileges and protections enjoyed by a natural citizen of that country. There are several benefits that are granted to a resident tax resident; while many of these privileges and protections are usually restricted, some are open to a tax resident.

You can easily understand why paying taxes in a country is important to be a tax resident. For one, it is a way to avoid double taxation. Once a person (specifically a foreigner) has been paying taxes for a specific number of years, they are considered tax residents. In addition, they are given many privileges that are not available to non-residents.

How can I be a dual tax resident?

Well, this is a question that many people ask as their South African tax residency status is threatened by tax evasion issues. South Africa has robust and refined statutory corporate laws, also known as company laws.

The laws provide rules on tax management and taxes paid. They also regulate all other corporate business activities including the corporate tax treatment of foreign-incorporated companies and its foreign residents who want to incorporate in South Africa.

In the past, most companies were not allowed to incorporate in South Africa unless they obtained a certificate of foreign resident status. As of September 2020, that policy has changed to become different in that the certificates can now be obtained as soon as the application is submitted.

The citizenship procedure is quite simple; the foreign resident must provide proof of residency with the South African authorities. Proof of residence can be several things like registration of a house, a bank account, a telephone, etc.

Foreign residents may also present themselves at an immigration office for verification. Apart from residency, the different documents required are certified copies of their passports and if they are not citizens of South Africa then a South African citizenship certificate must be presented.

A tax residency certificate is valid for a specific period of time. Most important is that a company is entitled to tax payments regardless of the time spent in South Africa. When applying for the certificate, it must be noted that the certificate can only be used for business operations in South Africa and not to acquire South African citizenship.

After these requirements have been fulfilled, an application for the certificate will be sent to the relevant South African Tax Authority. After several processing procedures the certificate will be issued and will be registered in the companies register.

Did we give you all the information you need to apply for tax residency in South Africa? Great! If not though, no worries. Our tax services offer you a simple solution to apply for dual tax residency, get in touch today to learn more!