Have you heard of an AIT (Approved International Transfer)? Not sure what it is or when you need one? Rand Rescue has you covered!
Find out everything you need to know about AITs from SARS and when you might need to apply for one.
What Is An AIT?
AIT stands for Approved International Transfer – it’s basically the new name for a tax clearance from SARS to move funds outside of South Africa.
In April 2023, SARS introduced the AIT to replace the range of different tax clearance documents including the Foreign Investment Allowance tax clearance and the Emigration tax clearance.
Prior to this, you would apply for a Foreign Investment Allowance (FIA) tax clearance certificate if you had already used your annual single discretionary allowance (SDA) of R1m and wanted to move further funds up to an additional R10m in the same calendar year.
You would have applied for an emigration tax clearance if you were wanting to move funds overseas as part of the old financial emigration process, or the newer tax emigration process.
In April 2023, these tax clearance types fell under the new name of an Approved International Transfer instead.
When Do I Need An AIT?
There are generally two common reasons to apply for an AIT and it depends on what your tax status with SARS is at the time.
SARS Tax Resident
If you are tax resident with SARS, that is you have not formally changed your status from resident to non-resident, you will need an AIT to move funds out of South Africa AFTER you have used your annual R1m single discretionary allowance to move your rands overseas.
As a SARS tax resident, you are entitled to move up to R1m per adult per calendar year overseas with NO need for an AIT.
After you have used your R1m SDA, you will need an AIT for each transfer overseas in the same calendar year. The maximum you can transfer over your R1m SDA is an additional R10m using an AIT. That means you can transfer up to R11m in total outside of South Africa per calendar year as a SARS tax resident.
SARS Non-Resident
If you have formally changed your tax status at SARS to non-resident, you will need an AIT for every transfer you make overseas.
Note that you are only able to move funds out of South Africa using a non-resident bank account. If you have any other account type, your bank will not be able to approve sending your funds overseas – they can only be sent from a non-resident account. This account is simple to open from overseas, either before or after you change your tax status at SARS to non-resident.
Unlike SARS tax residents, if you are non-tax resident there is no limit to the value of the AIT you can apply for.
What Documents Do I Need To Submit When Applying for an AIT?
When you apply to SARS for an AIT in order to send your rands overseas, the following supporting documents are commonly required:
- Specific documents showing the sources of the funds to be transferred
- A statement of your assets and liabilities (local and foreign) for the latest three tax years
- If you are non-resident for tax purposes in South Africa, confirmation that you have ceased to be a resident for tax purposes, including the date on which you ceased to be a resident
- A power of attorney where the AIT application is submitted by a person other than the taxpayer.
SARS may ask for additional supporting documents and this can vary from case to case. You can see a full list of supporting documents required depending on the source of the funds on the SARS website here.
Does an AIT Expire?
Yes – generally an AIT is valid for 12 months from the date it is granted.
This means you can move funds out of South Africa to the value noted on the AIT for a period of 12 months after it is issued.
You can either move the full value at once, or you can do multiple transfers over the AIT validity period, up to the total value the AIT states.
For example, you are issued with an AIT for R5m on 1 June. You can either transfer R5m immediately on grant, or you can transfer several smaller amounts to the total value of R5m up to 31 May the following year.
Do I Need To Be Tax Compliant With SARS To Get An AIT?
Yes, you do need to be tax compliant with SARS in order for an AIT to be issued.
You will need to ensure that:
- You do not have any outstanding tax returns.
- You have no outstanding debts to SARS unless a payment arrangement or suspension of payment has been agreed to.
- You are registered for all the tax products that you are liable for.
- Your registered particulars are up to date.
- You have either merged (via the Merge tool on eFiling) or declared (on the ERC01 form available as part of the TCS process on eFiling), all your registered tax reference numbers
You can find out how to check your current compliance status via SARS eFiling here.
Can I Transfer Funds Overseas With A Good Standing Certificate From SARS?
No, you cannot use this to transfer funds outside of South Africa. This type of tax certificate only helps confirm that your SARS profile has no outstanding returns or debts.
Hopefully this had helped you find out everything you need to know about AITs and when you might need to apply for one from SARS.
Need help getting your savings out of South Africa?
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