SARS Coming After Expats

Pension: SA Could Lose Critical Boost

- Michael Kransdorff

The two-percentage-point value-added tax (VAT) hike was not the only controversial tax proposal in the 2025 Budget That Never Was. Quietly tucked away in the leaked version of the 2025 budget review was a policy change that could chase away much-needed skills, capital, and investment: the proposed amendments to the cross-border tax treatment of retirement funds.

This seemingly technical tax tweak has significant real-world consequences for foreign professionals moving to South Africa and South African expats returning home after working abroad.

A tax on returning talent and investment

Under current tax rules, foreign retirement lump sums, pensions, and annuities received by South African tax residents are exempt from taxation—particularly if they relate to work done abroad before relocating to SA.

This exemption has long been an incentive for experienced professionals and retirees to bring their wealth and expertise into the country.

This incentive is now under threat.