South African law requires any person who becomes liable for tax, whether it be income tax, VAT or Capital Gains Tax, to register as a taxpayer with the South African Revenue Service (Sars) and obtain a tax number. This unique identifier, issued by Sars, tracks and manages your tax obligations and compliance.

This applies to South African residents and foreigners who do business in South Africa, and there is no getting around it. 

Without a tax number, your ability to work, invest, run a business, or access financial services in South Africa is limited. A tax number is more than just a number; it is your key to participating fully in the country’s financial and economic ecosystem.

For foreign individuals, obtaining a tax number is often one of the earliest administrative steps after sorting out immigration or travel documents. But with Sars now discouraging walk-ins at its branches and shifting to digital and appointment-based processes, this step can quickly become complicated and time-consuming.

Common Challenges for Foreign Individuals

SA Contact Details Matter
A major obstacle is that Sars does not accept foreign contact details during tax number registration. Consequently, many foreign nationals who do not have South African contact details are unable to complete the registration process independently while still abroad. To save time and avoid frustration, many individuals eventually turn to online sources and AI tools to assist with this process, but they will be better off engaging with a tax specialist who has experience in this field.  

eFiling and Tax Registration are not the Same

Another misconception arises when individuals believe they are registered for a tax number, only to have a tax expert discover later that they have merely created an eFiling profile with no tax number linked to it. This leaves them unable to demonstrate compliance or access essential services. 

One Person, One Tax Number Rule

Under Section 20(1) of the Tax Administration Act (TAA), every taxpayer may have only one tax number.

This can become a common pitfall for South African expats. After years abroad, many assume they no longer have a tax number if they were inactive on Sars’ platforms. They are unaware of the fact that the first tax number, linked to their South African ID, is still the only tax number needed. However, many inadvertently register a new tax number using their passport details.

This can create duplication issues, not easily fixed if you are not familiar with Sars systems. The correct approach is to reactivate and correctly link the existing tax number through Sars-approved procedures. This is best handled by professionals.

Inactive, Deregistered, or Incorrectly Linked Tax Numbers
Often, the challenge is not that a tax number does not exist, but rather a problem with its status or visibility:

Inactive tax numbers: Usually due to an individual, whether foreign or a South African citizen, not been active in submitting returns for several years. This may be because of unemployment, relocation abroad, or economic inactivity.

Deregistered tax numbers: Sars may deregister the tax number when a taxpayer shows no activity for an extended period.

Incorrectly linked on Sars system: A tax number may exist but may not be linked correctly on an individual’s eFiling profile. 

Due to these challenges, many individuals find themselves in administrative limbo, unable to register, retrieve, or access their Notice of Registration.

Where These Issues Commonly Arise for SA Expats and Foreign Individuals Wishing to:

• Access inheritance held in South Africa: For example, someone who left the country at a young age to study abroad and now requires a tax number in order to release or administer an inheritance held in the country.

• Encash insurance policies or investments: Those who previously worked in South Africa and now need to encash matured policies or investment products for transfer abroad.

• Invest in the South African economy: Such as individuals looking to invest in a local business, acquire shares, or contribute to investment funds.

• Purchase property: Foreigners buying a holiday home or rental property in Cape Town or Durban, must take note that Sars requires them to be registered for tax before a transfer can take place, to ensure that transfer duty are correctly processed. 

• Take up employment in South Africa: Anyone relocating to the country for work must obtain a tax number before commencing employment.

How to Get It Right: What Effective Compliance Requires

Proper tax registration, especially for foreign individuals and South African expats, requires more than just submitting documents. The process often involves:

Gathering the required supporting documentation, including ID or passport details.

Conducting checks to identify any existing Sars linkages, ensuring the correct tax number is reactivated should it exists.

Facilitating communication with Sars to ensure registration is completed accurately and efficiently.

With the right guidance and understanding of Sars’ requirements and procedures, navigating the tax number process does not have to be stressful. Leave it up to experienced tax practitioners to take the complexity off your plate, ensuring peace of mind with registering for a tax number and ensuring it is linked correctly.

Do not let tax registration hurdles hold you back, let us help you unlock your full potential in South Africa.

Written by Chrispos Seete, Sars Compliance Specialist at Tax Consulting SA.