About Taxbordr: founder-led South Africa-Portugal advisory
Taxbordr is a Portugal-registered cross-border tax practice run by Telmo Ramos, member of the Ordem dos Economistas (Cédula nº 16379), based in Lisbon, with prior Big Four experience at KPMG Luxembourg and EY Lisbon. We work with South African residents moving to Portugal, dual SA-PT citizens, and South African tax practitioners whose clients have already moved. Typical engagements are a Tax Position Review before move (sequencing the Section 9H exit charge and the SARS RAV01 against the Portuguese residency start date), an IFICI eligibility decision once the move date is set, and annual filing thereafter. We do not submit RAV01 to SARS or file ITR12 returns. Your South African tax practitioner does. We own the Portuguese position and supply treaty-aligned figures.
Ceasing SARS tax residency: RAV01, not "financial emigration"
The "financial emigration" procedure was phased out by the South African Reserve Bank on 1 March 2021. The current procedure is cessation of tax residency with SARS via the RAV01 (Registration, Amendments and Verification) form, supported by evidence that one of the residency tests is no longer met. The two SARS tests are ordinarily resident (the common-law habitual-life-and-affairs test) and the physical presence test (91 days in the current year and 91 days in each of the previous five years and more than 915 days in aggregate over those five years). Failing either limb of physical presence, plus a successful ordinarily-resident exit, triggers cessation. SARS issues a Notice of Non-Resident Tax Status confirming the cessation date. The cessation date is the trigger for the Section 9H exit charge.
Section 9H deemed-disposal CGT on cessation date
On the cessation date, Section 9H of the Income Tax Act deems a disposal of all worldwide assets at market value, with two material carve-outs: South African immovable property (it remains in SA tax scope as long as held) and interests in South African retirement funds (RA, preservation, pension, provident). The deemed-disposal gain is computed in ZAR and falls into normal CGT (40% inclusion for individuals, taxed at the marginal rate, effective ceiling around 18%). The exit charge is the largest single number on most South African move files. Pre-move planning is about: (a) identifying the assets in scope, (b) considering the use of unused annual exclusions or carried-forward losses, (c) timing the cessation date relative to material disposals, and (d) lining up the Section 9H base cost so the eventual real-world disposal does not double-count.
Retirement funds: post-March 2021 framework
Retirement annuities, preservation funds, and pension/provident fund interests are excluded from the Section 9H deemed disposal. They remain inside South African tax scope until withdrawn. Post-1-March-2021 framework: a member may withdraw the full RA or preservation balance (rather than the previous one-third commutation) after three consecutive years of non-residence, with Tax Compliance Status (TCS) verification by SARS. Pension and provident fund withdrawals have separate rules tied to the type of fund and the date of contributions (the T-day reform on 1 March 2021 redesigned vested vs non-vested rights). Withdrawal lump sums are taxed under the SA retirement lump-sum tables. On the Portuguese side, the same withdrawal is reportable on Modelo 3 Anexo J as Category H, with SA withholding claimed as a Foreign Tax Credit limited by the treaty cap.
SARB exchange control: still relevant
SARB's exchange-control regime did not disappear with the financial-emigration phase-out. The single discretionary allowance (R1 million per calendar year) and the foreign capital allowance (up to R10 million per calendar year, requiring a Tax Compliance Status) continue to apply for capital flows from South Africa abroad. Authorised Dealer reporting on flows above the thresholds is the bank's responsibility, but the documentation (TCS, source-of-funds, Section 9H provisional payment) sits with the client. For larger transfers (proceeds of property sale, RA encashment), the order of operations is: SARS cessation, Section 9H provisional payment / settlement, TCS clean, then Authorised Dealer transfer. Skipping that order frequently results in the bank holding the transaction.
Portuguese residency: CIRS art 16 and the rolling test
Portuguese tax residency is set by CIRS art 16: 183 days of physical presence in Portugal in any 12-month period beginning or ending in the year, or, on any day of that period, having a dwelling in Portugal under conditions suggesting habitual residence. The 12-month window is rolling. SA cessation date and PT residency start date do not have to coincide. They often differ by months. The gap between the two anchors which country has first taxing rights on disposals that fall in the gap. We document both dates explicitly in the Position Memo and confirm with SARS-side and AT-side filings.
South Africa-Portugal Tax Convention
The 2008 SA-Portugal Convention sets the allocation. Pensions article: residence state. SA pensions paid to Portuguese residents are taxable in Portugal as Category H, with SA withholding capped by the treaty. Dividends and interest: limited withholding in the source state, FTC in the residence state. Real estate gains: source state (immovable property situs). The 2008 treaty does not include all the BEPS-era provisions a 2025-vintage treaty would, so the analysis is article by article rather than mechanical. For Portuguese filing, foreign income enters Anexo J with the country code and the SA-side withholding documented per pay event.
IFICI eligibility for South African arrivals
IFICI (Incentivo Fiscal a Investigação Científica e Inovação, EBF art 58-A) is available to new Portuguese tax residents who were not Portuguese tax resident in any of the previous five years and who carry on a qualifying activity. Most South African arrivals satisfy the five-year non-residence limb. The activity test runs through one of the seven paths (qualifying profession under Anexo I, certified startup, RFAI, R&D personnel via SIFIDE, AICEP/IAPMEI investment project, university teaching, Madeira/Azores). Application deadline is 15 January of the year following the year residency was established. IFICI does not exempt pension income (Cat H) or blacklisted-jurisdiction income (CIRS art 81 n.º 4-5).
Common South African move mistakes we re-litigate
Saying "I financially emigrated" when the file actually documents post-2021 cessation. Different framework; different SARS forms.
Treating Section 9H as triggered on the date of physical departure rather than the SARS-confirmed cessation date.
Withdrawing the RA before three years of non-residence elapse and getting the lump-sum table outcome, then realising the wait would have produced a better outcome.
Missing TCS verification before instructing the Authorised Dealer to transfer the proceeds.
Using the 2008 SA-PT treaty as if it were a current-vintage BEPS-era instrument.
Frequently Asked Questions
How do I cease South African tax residency now that financial emigration is phased out?
The current procedure is RAV01 cessation with SARS, supported by evidence that the ordinarily-resident or physical-presence test is no longer met. SARS issues a Notice of Non-Resident Tax Status confirming the cessation date.
What is the Section 9H exit charge?
Section 9H of the Income Tax Act deems a disposal at market value of worldwide assets on the cessation date, with carve-outs for South African immovable property and SA retirement-fund interests. The gain is taxed under standard CGT.
When can I withdraw my retirement annuity after moving?
Under the post-1-March-2021 framework, you can withdraw the full RA or preservation balance after three consecutive years of non-residence, with Tax Compliance Status verification by SARS. Pension and provident fund rules are separate.
Are South African pensions taxed in Portugal?
Periodic pension payments are taxable in the residence state (Portugal) under the SA-Portugal Convention. They flow to Modelo 3 Anexo J as Category H, with SA withholding claimed as a Foreign Tax Credit limited by the treaty.
Do I still need SARB exchange-control approval?
Yes. The single discretionary allowance (R1m / year) and the foreign capital allowance (up to R10m / year, requires TCS) remain. The Authorised Dealer (your bank) handles the reporting; you provide TCS, source-of-funds, and Section 9H settlement evidence.
Can I qualify for IFICI as a South African arrival?
If you have not been Portuguese tax resident in any of the previous five years and you carry on a qualifying activity (one of the seven IFICI paths under EBF art 58-A), yes. Application deadline is 15 January of the year following residency. IFICI does not cover pensions.
Can my SA tax practitioner and Taxbordr work the same file?
Yes. We own the Portuguese position (Modelo 3, Anexo J, AT correspondence, residency dates) and supply your South African practitioner with treaty-aligned figures so the SARS file and the AT file reconcile.