When you apply for a Tax Compliance Status (TCS) in respect of foreign investment allowance for individuals, you are required to submit the following supporting documents:
- Relevant material that demonstrates the source of the capital to be invested. For more information regarding the supporting documents required in relation to the source of capital that you have specified on your application, refer to the section below detailing the requirements per source.
- Statement of assets and liabilities for the previous three tax years (this should include disclosure of all investments, loan accounts and distributions from local and foreign companies, trusts, etc.)
- Applicable Power of Attorney where the TCS application is submitted by a person other than the taxpayer.
Non-Resident Applications
- Relevant proof that the taxpayer has ceased to be a resident for tax purposes in South Africa, including the date on which the Taxpayer ceased to be a resident is required to be submitted.
- Detailed Capital Gains Tax Calculation schedule relating to any tax payable on deemed disposal of assets on the day before the taxpayer ceased to be a tax resident, in accordance to Section 9(H)(2) of the Income Tax Act.
- If, the non- resident application is for a family unit and one or more members of the family unit are registered for tax purposes, they must apply separately to be issued with a TCS Pin.
Note: In respect of the withdrawal of retirement funds (lump sum benefits from pension preservation, provident preservation and retirement annuity funds) when South African Residents ceased to be resident for tax purposes in South Africa, payment of lump sum benefits to such individuals shall only be allowed if the individual member has remained non-tax for at least three consecutive years.
Supporting documents demonstrating source(s) of the total value of the Approval of International Transfer
In addition to the general supporting documentation listed above, the following specific documents that demonstrate source(s) of the Total Value of International Transfer must be submitted and attached to the case:
- Savings / Cash:
- Bank statement issued on the date of the TCS application, reflecting the cash/ savings value.
- Supporting documents that demonstrate and/ or prove where the cash/ savings originated from.
- Should the taxpayer claim that the source of the funds to be invested is annual income / salary, then the administrator must review the past three year’s taxable income on the ITS system to ascertain the reasonableness of the statement.
- Distributions from a trust:
- Copy of Trust deed.
- Resolutions from the Trust making the distributions.
- Details of the source of funds distributed by the Trust.
- Bank statement of the taxpayer issued on the date of the TCS application, reflecting the distribution from the Trust.
- Bank statement of the Trust reflecting the distribution to the taxpayer, not older than a month.
- Trust’s latest share portfolio statement (not older than a month). This statement will also include the amount of shares and current market value.
- Latest Trust Financials.
- Donation:
- A declaration of the donation (IT144).
- Bank statement of the donor reflecting the donation paid, not older than a month.
- Bank statement of the donee issued on the date of the TCS application, reflecting the donation received.
- Proof (Copy of the receipt) of donations tax paid (not applicable to donation between (spouses).
- Inheritance:
- A copy of the Final Liquidation & Distribution account stamped and signed by the Master of the High Court.
- Bank statement issued on the date of the TCS application, reflecting the inheritance received.
- Loan:
- Between individuals:
- The signed and complete loan agreement.
- Bank statement of the lender, showing the loan amount, not older than a month.
- Details of the source of capital of the lender.
- Bank statement of the borrower issued on the date of the TCS application, showing the loan amount.
- Between Trust and trustee or beneficiary:
- The signed and complete loan agreement.
- Bank statement of trustee or beneficiary issued on the date of the TCS application, showing the loan amount.
- Latest Trust Financials.
- Bank statement of Trust showing, the loan amount, not older than a month; or
- Trust’s latest share portfolio statement (not older than a month). This statement will also include the number of shares and current market value.
- Between company and director or employee:
- The signed and complete loan agreement.
- Bank statement of the borrower issued on the date of the TCS application, showing the loan amount.
- Company’s latest annual financial statements.
- Between individuals:
- Sale of property:
- Original letter of the Conveyancer to confirm the transfer of the property and that the money will be transferred from the trust account; or
- Proof of receipt of the proceeds in the applicant’s bank statement not older than a month.
- Where the property was jointly owned, the proceeds of the sale to be clearly split as per source document.
- Capital Gains Tax calculation on the sale of property.
- Sale of Shares and other securities:
- Capital Gains Tax calculation on the disposal of the shares.
- Portfolio statement reflecting the sale of shares, not older than a month. This statement will also include the number of shares and current market value.
- Do not insist that the taxpayer transfer shares, investments, unit trusts, fixed deposits over to a savings account.
- Sale of Crypto Assets:
- Trading account statement reflecting the trade of the crypto asset.
- Bank statement, issued on date of the TCS application, reflecting the amount available for transfer.
- Transfer of Listed Securities:
- Details of the locally listed securities that the Taxpayer will be transferring to an exchange that is outside South Africa.
- Capital Gains Tax calculation on the transfer of the shares.
- Investment income – Local and foreign:
- Schedules of the interest / dividends received indicating the source and amount of interest / dividends.
- Royalty Income:
- Source of royalty income.
- Proof of royalty payment.
- Earnings:
- Where a taxpayer has recurring foreign investments not exceeding R30 000 per annum a copy of a salary slip is needed once a year.
- The policy number noting that the institution (e.g. Sanlam / Old Mutual) will apply on behalf of the taxpayer.
- Income from any entity, local or foreign, in which the taxpayer holds a direct or indirect beneficial interest:
- The nature of relationship with the entity.
- Proof of amounts/distribution received from such entities.
- For an owner of any businesses, the company group structure, profile and other group investments.
- If a director of company or member of a Close Corporation is a shareholder, a shareholder’s agreement and share incentive scheme agreement.
- Other:
- Documentary proof and explanation.
