Approval for International Transfers (AIT) – The New Process

Approval for international transfers (AIT) – The new process

On the 24^th of April 2023 the South African Revenue Services released the mandate – the Approval for International Transfers (AIT) system on efiling to replace the old Foreign Investment Allowance (FIA) system. The change came out of the blue for taxpayers and tax practitioners as it is aimed to enforce compliance on taxpayers who are non-compliant.

Non-residents taking money out of SA?

SARS has clamped down on the annual R1m allowance and has said that non-resident taxpayers are no longer entitled to this and will need to make an application to take the funds offshore. Resident taxpayers will still be entitled to their R1m allowance for a calendar year and would have to complete an application for any amount that exceeds the amount of R1m.

Enhanced process

SARS has improved their systems to try to ensure a simpler application process, while also making it harder for non-compliant applications. The online application form has had a complete overhaul with a focus to ask the correct questions at the start of the application process to ensure an effective process once the application has been submitted.

The form requires you to answer three questions, namely:

1. Are you a beneficiary of a trust?
2. Do you have shareholdings in companies?
3. Do you have any loans to a trust?

If you answer yes to any or all these questions you will be required to furnish the full details of all the companies and trusts that you hold a stake in.

In the past you had to supply 3 years local assets and liabilities for the application and now SARS has increased that scope to include all foreign assets and liabilities. This information will improve SARS traceability, and to align with their current focus on high net wealth individuals and to try pick up on individuals living “beyond their means”.

Once the return is filed you are still required to submit your standard supporting documentation:

• Proof of source of funds
• Bank statements not older than 14 days from date of application with the funds available
• 3 years assets and liabilities (both local and foreign)
• Any other documentation relating to the application or as requested by SARS

Conclusion

The new AIT process has experienced some growing pains with confusion on both the applicants’ side and on the SARS side, causing delays and backlogs but this will improve with time. The process is a lot more in depth and time consuming and is likely to scare away some people from the process. If your application is done methodically, and with the assistance of your trusted tax practitioner, the difficulty and frustration can be greatly reduced.

You can call our offices on (011) 794-5582 for assistance with the above process.