New rules for transferring South African-sourced income abroad

On 22 October 2025, the South African Reserve Bank issued Exchange Control Circular 15/2025, introducing significant changes to how non-residents transfer South African-sourced income abroad.

While the rules cover a wide range of income types, they have the biggest impact on:

• South Africans who have ceased tax residency
• Foreign non-residents earning income from South Africa

All offshore transfers for these groups now require stricter SARS verification, and Authorised Dealers must conduct more rigorous checks before releasing funds. These measures reflect ongoing industry feedback and SARS’s push for greater compliance and traceability of cross-border income.

1. Unified tax-compliance requirement for non-resident income transfers

No income can now be transferred offshore without SARS verification, regardless of the income type or beneficiary’s residency status. For every income transfer involving a non-resident or a South African who has ceased tax residency, Authorised Dealers must obtain one of the following:

• Manual Letter of Compliance – International Transfer (MLC): For beneficiaries not registered on the SARS database, including most foreign non-residents.
• TCS – Approved International Transfer (AIT) PIN: For beneficiaries registered with SARS, including individuals who have ceased tax residency but remain in the system.

This applies to dividends, trust distributions, rental income, directors’ fees, and other cross-border income streams.

2. Relief for tax non-residents receiving pensions and annuities

A key update for non-residents is the continued exemption on transferring pension and annuity income abroad. South Africans who have ceased tax residency, as well as foreign non-residents, may still transfer compulsory annuities, living annuities, pensions and related late-payment interest without needing to obtain a TCS each year.

Conditions:

• Income must come from a registered retirement fund or licensed insurer
• Payments must be recorded under specific SARS tax codes (3602/3652, 3603/3653, 3610/3660, 3618/3668)
• A once-off confirmation must be provided at the start of the contract or before the first transfer in a new tax year

3. Stricter requirements for trusts, rentals, dividends, and other income

All other income streams now require SARS approval before they can be transferred offshore.

Trust income

Transfers are now restricted to cases where:

• The beneficiary is a non-resident or a person who has ceased SA tax residency, and
• SARS issues an MLC or AIT PIN

This is especially relevant to South Africans living abroad who receive trust distributions.

Dividend income

Mandatory SARS verification closes previous loopholes: MLC for non-registered foreign recipients, AIT for those registered with SARS.

Rental Income

Transfers require a rental agreement, confirmation that the amount is reasonable, and SARS compliance (MLC or AIT PIN), affecting both non-resident property owners and former residents renting SA-based assets.

Other passive income

Directors’ fees, business distributions, and other residual income also require approval from SARS.

Implication

Former residents earning income sourced in South Africa should anticipate a more rigorous approval process for transfers.

4. Income transfers for residents temporarily abroad

Residents who have not ceased tax residency are also affected:

• Pension and annuity income can still be transferred freely
• All other income must be transferred under the Single Discretionary Allowance (SDA) or Foreign Investment Allowance (FIA)

This ensures they remain subject to the same exchange control rules as South African residents.

5. Practical implications for non-residents and tax non-residents

Former South African residents:

• Offshore pensions and annuities are unaffected
• All other income requires SARS verification each time
• A fully updated tax-residency cessation is essential

Foreign non-residents:

• SARS documents are required even for first-time interactions
• Many will need an MLC
• Authorised Dealers verify identity, residency, and tax status for all income

Trustees and administrators:

• Additional approvals may delay offshore distributions
• Accurate documentation of beneficiary residency is critical
• Trust distributions now require full compliance

6. How Sable International can help

The new rules add complexity, but we can help South Africans abroad and non-residents navigate them with confidence. We provide end-to-end support across tax, compliance, residency, and foreign exchange to ensure smooth, compliant transfers.

Our services include:

• Tax emigration and residency cessation: Full SARS management to update your status
• Retirement annuity transfers: Guidance on encashment, tax clearance, payouts, and offshore remittance
• Trust distributions: Assistance with SARS compliance, residency verification, and remittance processing
• Property rental and dividend transfers: Ensuring documentation is complete and recurring transfers run smoothly
• Foreign exchange execution: Efficient, compliant outward transfers through Authorised Dealers

Call today to speak with a dedicated broker so you can start building your future beyond borders. Contact our forex team on [email protected] or call +27 (0) 31 536 8844 or +27 (0) 657 2160.