Cross-border tax in Portugal: simplified for South African expats

Portugal’s warm climate, relaxed lifestyle, and welcoming culture have made it a top choice for South Africans seeking a fresh start abroad. While you enjoy the sunshine and slower pace of life, one thing should not be overlooked: have you officially cut your financial ties with South Africa, or does SARS still consider you a South African tax resident?

Many expats assume that simply moving overseas ends their tax obligations in South Africa. Unfortunately, that’s not the case. South Africa taxes its residents on worldwide income, which means that without formally ending your tax residency, SARS can still claim tax on income earned in Portugal.

Understanding tax emigration

Tax emigration is the formal process of notifying SARS that you are no longer a South African tax resident. It’s not about physically leaving the country but rather about changing your tax status officially.

The process involves updating your SARS eFiling profile, submitting the required documentation, and providing proof that you’ve established tax residency in another country, such as Portugal. Once SARS reviews your application and confirms that you no longer have strong ties to South Africa, you’ll receive written confirmation that your status has changed.

Why it matters for expats

1. Avoiding double taxation

Failing to end your South African tax residency can result in SARS taxing your global income, including your Portuguese earnings. Even with the Double Taxation Agreement (DTA), you may still have to report income to both countries, risking mistakes, stress, or double taxation.

Completing tax emigration means that SARS will only tax income earned in South Africa, such as rent from property you still own. All income earned in Portugal, including your salary, pension, or investments, will be subject solely to Portuguese tax law. This reduces your tax exposure and makes managing your finances far easier.

2. Estate planning benefits after tax emigration

Once your South African tax residency officially ends, estate planning becomes simpler and potentially more tax-efficient. As a non-resident, only assets in South Africa, such as property or shares, may still be subject to South African Estate Duty.

Your global assets can then be managed under Portuguese inheritance laws, which are generally more favourable. Transfers to close family members, including a spouse, children, or parents, are typically exempt from Portugal’s inheritance tax, while other beneficiaries or non-property assets may face a 10% flat rate.

Planning your estate after tax emigration helps protect your wealth, reduce cross-border taxes, and ensure more of your assets pass to your loved ones.

Navigating inheritance tax in Portugal

With South African tax matters resolved, it’s important to understand Portuguese inheritance rules. Portugal is widely regarded as one of the most favourable European countries for inheritance planning. Close family transfers are generally exempt, while other transfers may incur a 10% flat tax.

Because Portugal's tax system differs significantly from South Africa’s, professional cross-border advice is essential. A coordinated approach ensures your global assets are structured efficiently and avoids triggering tax obligations in both countries.

Exclusive cross-border tax and wealth event

To help South African expats make sense of their cross-border financial responsibilities, Sable International is hosting a three-day tax and wealth event in Portugal.

You’ll be able to meet our tax and financial experts one-on-one, ask questions, and receive guidance tailored to your unique situation. Learn how to:

• End your South African tax residency correctly
• Avoid double taxation and SARS complications
• Optimise estate and inheritance planning

Event dates:

• 4 November – Estoril | InterContinental Cascais-Estoril
• 5 November – Avenida | Praia D’El Rey Marriott Golf & Beach Resort
• 7 November – Almancil | Wyndham Grand Algarve

Don’t miss this exclusive opportunity to join our expert-led presentations, where UK and EU-regulated advisers will guide you through seamless cross-border wealth planning. Contact us today to discover how we can tailor the right solution for your financial needs. Email [email protected] or give us a call on +44 (0) 20 7759 7519.