Lovemore Ndlovu | Head | SARB Engagement and Expatriate Compliance | Tax Consulting SA | mail me |
At the end of October 2025, the South African Reserve Bank (SARB) introduced significant changes to how cross-border income transfers are processed. These updates tighten compliance and strengthen the alignment between SARB and the South African Revenue Service (SARS).
Under SARB’s new rules, no South African-sourced income may be transferred abroad until SARS verifies an individual’s non-resident tax status and overall tax compliance. These amendments appear in Exchange Control Circular No. 15/2025. They apply to several types of locally sourced income. This includes rental income, trust distributions, director’s fees, royalties, dividends and pension or annuity payments for South Africans living abroad.
While the goal is to enhance oversight and ensure traceability, SARB’s new rules also create more stringent documentation and verification obligations. These affect Authorised Dealers, corporate clients and taxpayers who need to transfer income out of South Africa.
SARS approval is now required for all offshore income transfers
The updated requirements now appear in the Authorised Dealer Manual. Under the revised framework, non-residents or individuals who have ceased South African tax residency must obtain SARS verification before transferring any income abroad. This change marks a major shift.
Previously, these transfers could proceed without an AIT Tax Compliance Status (TCS) PIN or a Manual Letter of Compliance (MLC). Now, Authorised Dealers require one of these documents before they may process a transfer. This adjustment introduces notable administrative complexity. It particularly affects recurring income, such as salaries or directors’ fees, still earned in South Africa.
Some banks may continue processing recurring payments once they verify initial supporting documents, such as IRP5 or IT3(a) certificates. However, this depends on internal policy and still requires SARS confirmation under SARB’s new rules.
Expanded requirements for retirement and pension fund transfers
Retirement and pension income transfers face some of the most substantial updates. Although SARB introduced limited procedural relief, the documentation requirements have increased.
Under SARB’s new rules, the following criteria now apply:
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Eligibility to transfer
Only pensions or annuities paid by registered retirement funds or licensed insurers qualify for offshore transfer. Payments from unregistered entities do not.
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Annual TCS for good standing is no longer required
Non-residents and individuals who have ceased South African tax residency may now transfer annuities or pensions, including late-payment interest, without securing an annual Good Standing TCS PIN.
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Verification through tax codes
Relevant income must appear on an IRP5 or IT3(a) using the correct SARS tax codes: 3602 or 3652.
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Supporting documentation
Authorised Dealers must obtain approved documents from the fund, administrator, or insurer.
Acceptable proof includes:
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- the most recent IRP5 or IT3(a);
- a payment advice showing the tax code for a new annuity or pension; or
- a payment advice confirming the tax codes that will be used for reporting.
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Timing of verification
Verification is required only at the start of a new contract or before the first payment of the next tax year for existing agreements. Once verified, future transfers may continue without repeated submissions.
Requirements for rental income transfers
Transferring rental income from South African property now involves enhanced scrutiny. This applies whether the property is fixed, movable, or part of a rental pool.
Authorised Dealers may process transfers only when all conditions are met:
- The applicant must provide a copy of the rental or rental-pool agreement.
- The applicant must confirm in writing that the rental amount is reasonable relative to the property’s value.
- One of the following SARS compliance documents must accompany the request:
- a Manual Letter of Compliance (MLC) for beneficiaries not registered with SARS; or
- an AIT TCS PIN for beneficiaries who are registered taxpayers.
In practice, these requirements mean that non-residents receiving ongoing rental income must complete SARS compliance verification each time they transfer funds abroad. For property investors with monthly rental income, SARB’s new rules introduce a repetitive and time-intensive compliance burden.
Implications for corporates and financial institutions
Corporate entities face new operational challenges. Organisations that manage cross-border payrolls, expatriate remuneration or offshore remittances must now coordinate more closely across tax, compliance and treasury teams.
Authorised Dealers also face heavier administrative responsibilities. They must verify documents and obtain SARS validation before processing any transfers. These added steps may extend turnaround times for clients.
Outlook and advisory note
Although the revised Exchange Control framework aims to close compliance gaps, it also increases the administrative load for individuals and corporates. SARB’s new rules reflect a firm stance on tightening exchange-control compliance, especially for income, rental and pension-related transfers.
To minimise delays in offshore remittances, affected individuals and corporate clients should work with qualified professionals. These specialists can ensure tax obligations remain up to date and can obtain the required SARS documentation. They also help clients understand the specific documents needed for each type of income transfer, which reduces the risk of interruption.
