In late October 2025, to no fanfare, the South African Reserve Bank (SARB) quietly published an updated version of the Currency and Exchanges Manual for Authorised Dealers, following Exchange Control Circular 16/2025. These amendments are very significant for any non-resident who receives South African-source income, including individuals who have ceased South African tax residency and should be considered very carefully. And after a few years of loosening SARB requirements, this is a significant tightening up.
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The essence of the change is that authorised dealers (South African banks) must now be satisfied that the non-resident recipient is tax compliant with SARS before they may remit funds offshore. This is done through SARS’ Tax Compliance Status Approval for International Transfer (TCS-AIT PIN) where the individual/entity is registered with SARS. Where the non-resident is not registered with SARS, a Manual Letter of Compliance (MLC – International Transfer) will be required.
These rules apply to a broad range of South African-source payments, including dividends, rental income, trust distributions, director’s fees, royalties, pension and annuity income. Some banks may allow recurring pension/annuity payments if the initial IRP5/IT3(a) and status evidence is correctly submitted at inception, but this is still subject to bank policy and verification.
This new requirement looks especially problematic for non-residents who receive dividends. Even if the shares are endorsed as owned by a non-resident, it seems that an MLC will be required (if the shareholder is not registered with SARS, and we think most foreign shareholders will not be registered with SARS). It is unclear if a new MLC must be obtained for each dividend payment, or whether it is a “once for all” process.
In addition, individuals who historically “financially emigrated”, or who believed their exchange control status was settled through prior processes, may find those historical designations are not sufficient anymore. The banks will look for formal SARS confirmation of non-residency and the correct SARS approval (TCS or MLC) at the point of transfer.
Practical implications
These changes mean that funds which would previously have flowed offshore relatively easily may now be delayed or blocked until SARS approvals are produced. There is a clear linkage between SARS’ tax residency processes and exchange control clearance. This elevates the importance of formal cessation of South African tax residence, and the need to ensure that SARS and bank records align.
Non-residents with South African assets or income streams should be prepared for increased documentation, more interaction with SARS processes, and longer bank processing times. Structures holding South African assets with non-resident beneficiaries or shareholders should be reviewed to ensure that all parties have the correct SARS status and approvals in place.
Conclusion
The October 2025 amendments represent a substantive tightening of the South African exchange control regime in respect of non-resident payments. The requirement for SARS tax-compliance approval before funds leave South Africa is now hard-wired into the authorised dealer rules. For any person or structure expecting to remit South African-source income offshore, SARS tax residency status, SARS compliance, and the right SARS approval instrument (TCS-AIT or MLC) are now pivotal.
If you or your clients are non-residents receiving South African-source income, it’s vital to understand how these new exchange control requirements affect your ability to move funds offshore.
Our team can help you review your current structures, assess tax residency status, and ensure all the necessary SARS approvals are in place before transactions are initiated.
Get in touch with us today to safeguard compliance and avoid costly delays under the new SARB rules.
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