SA emigration and Capital Gains Tax

https://www.moneyweb.co.za/mymoney/moneyweb-tax/is-there-a-tax-saving-route-to-financial-emigration/?fbclid=IwAR2-rcqFkLOBsT1ihsldDnXXUwX0FfaaBWKaEeh-Vaak6t8fsKIWL5G6ul4

READER QUESTION
Is there a tax-saving route to financial emigration? If I proceed with financial emigration to Mauritius, will I still be personally liable for capital gains tax on the shares I hold in a company?

Brian Butchart / 9 September 2019:

I currently fully own Company A, which owns shares in another company, Company B. Company B went through a funding round and I’ve chosen to sell some shares belonging to Company A. I’ve paid capital gains tax (CGT) on the share sale amount from company A (22.4%). If I proceed with financial emigration to Mauritius by purchasing a property (or my company purchasing the property), will I still be liable for paying CGT personally for my shares held in Company A? If so, can you suggest any tax-saving route to financial emigration please?

The reader raises several points in that they wish to proceed with financial emigration, which is the most important aspect of the question, and how the relevant transactions will be treated.

Financial or formal emigration means a South African resident decides they will no longer be resident in South Africa and have the intention of leaving the country permanently, the main purpose of which is to access and transfer all South African funds and assets abroad, particularly those in retirement annuities (and now also preservation funds) prior to retirement.

Those with one foot out the door

Financial or formal emigration may also be to alleviate the potential tax liability to the South African Revenue Service (Sars) of those SA tax residents who currently work abroad and earn more than R1 million a year and have no intention of returning to South Africa (this has specific reference to the amendment of the Income Tax Act, which comes into effect on March 1, 2020).

Sars’s Interpretation Note 3, issued on June 20, 2018, and dealing with the ordinarily resident definition, states the following: “Generally, if a natural person emigrates from the Republic to another country, that person ceases to be a resident of the Republic from the date that person emigrates.”

This will result in the physical presence test being applied in the following tax year to determine if they are still a resident for tax purposes. If they are absent from South Africa for 330 days over the two tax years, they will no longer be a South African tax resident. The effective date will be the date on which emigration took place.

From that date, worldwide income will no longer be subject to income tax in South Africa – only income from a South African source will still be subject to tax in the country – subject to the provisions of any double taxation agreement that may exist between South Africa and the country in which the person now resides.

CGT liability

When South African resident taxpayers become non-resident for tax purposes (but don’t meet the ordinarily resident or physical presence tests) they may become liable for CGT. In the case of any person approved as a non-resident, the Income Tax Act treats the move as a deemed disposal of all assets.

When a person is no longer a tax resident, it is deemed that all assets are disposed of the day immediately before the cessation of residency. It is treated as if those assets are disposed of at market value on that day and then bought again at market value (which will be the new base cost when the asset is eventually sold in the future).

Whether the asset is physically sold or not is irrelevant, as a deemed sale for the calculation of capital gains is assumed on the date of emigration.

The only exception to this rule is immovable property. The act determines that immovable property won’t be included in the deemed disposal provision, as non-residents are still liable for CGT when selling property anyway.

Company shares wall fall in the CGT net

Therefore if you are buying property in Mauritius for Mauritian residency (purchase price of $500 000 or more) and your intention is to officially emigrate and make Mauritius your new tax residence, you will be liable for CGT on all discretionary assets in South Africa except immovable property, and this includes the shares in Company A.

Considering the implications of the capital gains tax liability, it is always a good idea to calculate the total estimated capital gain across all discretionary assets and/or any tax liabilities of any retirement assets, should you be withdrawing these from South Africa, in order to make an informed decision.

It is important to note that once the individual emigrates they need to adhere to the rules from both a South African Reserve Bank and tax (Sars) perspective thereafter.

Physical presence test

The physical presence test is based on the amount of time a person spends in South Africa during the year of assessment (tax year) and also during the preceding tax years. This test is only conducted if the person is not ordinarily resident during that tax year. The requirements refer to the number of days that a person must actually be present in the country during a tax year and also during the five tax years preceding the year under consideration.

Based on this test, a person is a South African tax resident and liable for income tax on their worldwide income in South Africa if they are physically present in the country for a period or periods exceeding:

91 days in aggregate during the year of assessment under consideration;
91 days in aggregate during each of the five years of assessment preceding the year of assessment under consideration; and
915 days in aggregate during the five preceding years of assessment.

If a person who is a resident is physically outside of the country for a continuous period of at least 330 full days immediately after the day on which they cease to be physically present, that person’s tax residency is deemed to have ceased on the day they left the country.

It is important to remember that a natural person who is ordinarily resident, spends time outside of the country, and intends returning is regarded as a tax resident – regardless of the period of time spent outside the country.

Before making any final decision to change tax residency, or to financially emigrate, it is always advisable to consult with a tax specialist.

You emigrated from South Africa! Really? What’s next?

Written by Hugo van Zyl CA(SA) TEP MTP(SA) 10 November 2019

You emigrated from South Africa! Really? What’s next?

Did you correctly emigrate from South Africa and what is you understanding of “emigrated”?

The Income Tax Act use the words “cease to be a resident”. Tax specialists, like writer prefers to add the word resident. The reason being, there is a difference between a tax resident and and an Exchange Control resident!

Being a person not resident for tax (tax non-resident) brings certain benefits, obligations and and often switch off certain tax exposures, but not all!

Once solely tax resident in a treaty country, you may escape SARS Income Tax but not SARS Estate Duty!

Yes, Countries like Mauritius and UAE have forced heirship or Sharia Succession rules, yet this does not remove the estate duty (situs or death taxes) in South Africa!

SA Ordinary Residence Tests:

It’s a common misconception that if a South African is living and working overseas they do not have to pay any South African income tax on their earnings. Although some overseas income may be exempt in terms of the Income Tax Act, it must be remembered that if you are classified as a South African resident you will be liable for tax on your overseas income.

A person will be treated as a resident for tax purposes if they are either ordinarily resident in South Africa, or if they meet the criteria of the physical presence test.

The ordinary residence test takes into account various factors in order to establish the country that would most accurately be described as the individual’s real home.

The physical presence test looks solely at the number of days spent in South Africa over the previous five years. A person will be treated as an SA resident when they meet all of the following criteria regarding the number of days spent in South Africa:

91 days in total during the current year of assessment; and
91 days in total during each of the previous five years of assessment; and
915 or more days during the previous five years of assessment

When is income exempt from South African tax? Foreign income earned by a tax resident will be exempt from South African tax if the person works as a crew member or officer of a ship which is engaged in the transport of passengers overseas, or in the prospecting, exploration or mining for any minerals from the seabed outside of South Africa. This exemption will only apply if the person was outside of SA for a total of more than 183 full days during the tax year. In addition, any salary earned by a South African for services rendered outside of SA on behalf of an employer will be exempt – if that person was outside of SA for more than 183 full days (including a continuous period of 60 days) during any 12-month period that started or ended during the year of assessment. This exemption does not apply to income made through contracting, which would be fully taxable. National Treasury has had its eye on this exemption since 2017 with the initial aim being to repeal it fully. The main reason provided for this proposed amendment was to curb situations of double non-taxation of foreign income such as when an individual’s employment income was not being taxed in either SA or the foreign country.

R1 million exemption The current proposal by National Treasury to repeal the exemption fully has now softened slightly, and from March 2020 (expected implementation date) the first million earned by a person who meets the criteria for exemption will be exempt, and any income earned above this will be taxed at the normal rates applicable to individuals. The individual will also be entitled to reduce their resultant SA tax liability by offsetting some or all of their foreign tax paid where applicable. Many SA residents have considered leaving SA to escape the tax net – but for a person who formally emigrates or ceases to be a tax resident, there may be significant capital gains tax implications. The person will be seen to have sold all of their assets, with the exception of immovable property situated in South Africa, at market value on the date they ceased to be a resident and will therefore be liable for tax on the resultant capital gain on those assets. Regardless of whether a person is considering a permanent or temporary move to pursue overseas work opportunities, it is worth discussing the idea with a tax consultant. These factors can then be included in the decision-making process and help to avoid any nasty surprises from Sars.

RSA: Taxmigration vs. Financialemigration

Reference: https://taxmigration.com/2019/09/20/taxmigration-vs-financialemigration/ – I gratefully acknowledge Hugo van Zyl’s authorship of this article:

Eventually we have SARS buy-in and confirmation that formal emigration is not a tax act process.

What we now need is SARS and all tax practitioners to stop using a brand name to refer to a SARB process referred to as “to formalise their Emigration ” an Exchange Control resident

I am often challenged about the term #taxmigration not being defined or referred to, anywhere in any tax act! It is correct, it is not a defined term, it is my brandname hence http://www.taxmigration.com

Equally so, financial emigration is a brand name and through rather controversial press articles the group behind the name got the world to use their brand name. Credit to their marketing strategy but its now time we go back to basics and true facts!

Formal Emigration is the correct and preferred word, and hopefully soon the following SARS extract will correctly refer to Formal Emigration

What is the impact of financial emigration on tax residence?

Acquiring approval from the South African Reserve Bank to emigrate from a financial perspective is not connected to an individual’s tax residence. Financial emigration is merely one factor that may be taken into account to determine whether or not an individual broke his or her tax residence. An individual’s tax residence is not automatically broken when he or she financially emigrates. The deciding factor remains whether or not an individual breaks his or her ordinary residence.

Source: SARS webpage

The above extract is not necessarily 100% correct!

The last sentence should perhaps have read:

The deciding factor remains whether or not an individual breaks his or her tax residents status because of DTA or tax treaty rules and tiebreakers or because they are truly no longer ordinarily (yes, not ordinary but ordinarily) resident.

The above mentioned extract is not the only place where the SARS webpage needs urgent attention. The following FAQ extract is also incorrect or at least incomplete:

What qualifies an individual as a non-resident?

An individual is regarded as a tax resident of SA if he or she is ordinarily resident in South Africa or meets the requirements of the physical presence test. If neither of these apply, the individual will be regarded as a non-resident.

For more information on these two tests, please refer to the Guide on the Residence Basis of Taxation for Individuals 2008/2009.

Source: SARS FAQ pages

The correct wording, we respectfully submit should be:
What qualifies an individual as a non-resident?

An individual is regarded as a tax resident of SA if he or she is ordinarily resident in South Africa or meets the requirements of the physical presence test. If neither of these apply, or should a person be deemed to solely tax resident in a DTA or treaty country, the individual will be regarded as a non-resident.

The SARS Glossary R page is indeed technically more sound where it states (and we selectively quote):

Resident

As defined in section 1 of the IT Act– Includes: Any natural person who is ordinarily resident in South Africa; or Any natural person who complies with the physical presence test; and …, but: Excludes any person who is deemed to be exclusively a resident of another country for purposes of the application of any agreement entered into between the government of South Africa and that other country for the avoidance of double taxation.
Source: SARS Glossary R

Formal Emigration vs. Financial Emigration- what is the difference?

Their is no such process as financial emigration! It is a brand name cleverly marketed by certain product suppliers. Tax law solution (to cease tax residency as envisaged in ITA section 9H) purposefully (or is it dangerously?) confused with a lucrative business to assist with Formal Emigration

What then is the true wording or correct SARB terminology to use and what is the source for this?

We quote from SARB FAQ pages:

In terms of exchange control policy, private individuals (natural persons) who reside permanently in a country outside the Common Monetary Area are required to formalise their emigration by completing a Form MP336(b).

In conclusion

We call on all tax practitioners, authorised dealers, journalists and forex dealers to rather revert to the correct terminology:
Formal Emigration

Financial emigration vs. becoming a non-resident for tax purposes: What’s the difference?

Financial emigration vs. becoming a non-resident for tax purposes: What’s the difference?
11th December 2018 by Editor
*This content is brought to you by Sable International. With offices in Cape Town, Durban, Johannesburg, Melbourne and London they are the perfect forex partner for businesses and individuals looking to transfer money into or out of South Africa.
By Tim Powell*

South African expats will have to face a changing tax structure in March 2020, which may affect their foreign income. This has forced many to think about and consider their tax residency status. We often see some confusion around the difference between financial emigration and becoming a non-resident for tax purposes. Many expats assume that either one, both or neither options may apply to them. It’s important that you understand what each process means before making any decisions regarding your tax status. We take a look at these in detail below to help you find the best option for your circumstances.

Becoming a non-resident for tax purposes
South Africa has a residence-based tax system, which means that residents are taxed on their worldwide income, regardless of where that income was earned. So, even if you’ve worked overseas for several years, if your tax residency is assigned to South Africa, you are required to declare your foreign earnings to the South African Revenue Service (SARS) and pay income tax. If your tax residency is assigned overseas, you are declared a non-resident and only income that is sourced in South Africa will be taxed by SARS.

How to determine your tax residency status
Your tax residency status is determined by SARS by way of two tests. These are the ordinarily resident test and the physical presence test. If you meet the requirements of these tests, you will be classified as a South African resident for tax purposes.

The ordinarily resident test looks at the location of your permanent home as well as where your assets and family are based. If these all point to South Africa, you will then be deemed a South African tax resident, regardless of the amount of years you’ve spent overseas.

The physical presence test calculates the amount of time you spend in South Africa. To pass this test and be deemed a resident for tax purposes, you need to be present in South Africa for:

91 days or more in the year of assessment
91 days or more in each of the preceding five years of assessment
915 days in total during those five preceding years of assessment
If you fail to meet any one of these requirements, you will not be deemed as physically present in South Africa. However, you will still be required to pay tax on your South African assets, such as property that you rent out.

What it means to financially emigrate from South Africa
Financial emigration is the process of making a formal application with the South African Reserve Bank (SARB) to become a non-resident of South Africa. Once you’ve undergone this process, your status with the SARB changes from a permanent resident, or resident living temporarily abroad, to a non-resident of South Africa for exchange control purposes.

This process is simply an exchange control matter and will not affect your South African citizenship. You will always legally be a South African and you can return to South Africa to live and work whenever you wish.

Read also: 5 things you need to know about financial emigration in 2018

Once you have financially emigrated, the SARB will change your residency status from resident to non-resident. Your bank will then open a blocked Rand account in which all your South African assets will be kept before being transferred overseas.

Financial emigration is not a simple process. The complexity of your application will differ depending on your circumstances. You don’t need to be present in South Africa to begin the process and it can be done from your home abroad.

Once the process is complete, you can access and transfer the following out of South Africa:

Proceeds from your South African retirement annuities before the age of 55
Future inheritance funds without being subjected to the South African resident exchange control
Passive income from rental, dividends, director’s fees or a salary
Proceeds from a third-party life policy
Financial emigration is not required to transfer proceeds of other assets such as bank accounts, discretionary funds, living annuities, pensions and provident funds, proceeds from sale of property and life insurance policies. These funds can be transferred using your R1 million and R10 million foreign investment allowances.

However, the initial and ongoing tax treatment may differ significantly between different assets. Therefore, it’s vitally important that you obtain the correct advice before making any decisions or applications regarding your assets and tax affairs.

Taxes on your South African-based income
Financial emigration does not exempt you from taxation in South Africa. You still need to pay tax on any South African-sourced income. These could include interest on capital invested in a local bank or income from property rental.

Who should consider financial emigration?
Financial emigration is not necessary for everyone. Whether it’s right for you will depend on what kind of retirement savings and assets you hold. However, if you want to access your retirement annuity, then financial emigration is the only option.

While current tax law does allow expats to access their retirement policies, that could change in the future. If you have decided that you will not be returning to South Africa on a permanent basis and want to ensure that all your tax affairs are in order before there are any other legislation changes, you may want to consider taking this route.

Where to start
The process of financial emigration is complex and each situation is unique, so it’s always a good idea to get in touch with a South African financial emigration specialist. They can carefully consider your personal circumstances and advise you on the best course of action.

There are potential tax implications when financially emigrating, as well as opportunities to implement tax-efficient plans. For example, financial emigration can trigger a capital gain event. Seeking the advice of someone who has cross-border financial and tax planning experience will ensure that you make the right decisions.

SA Tax Worldwide 1 March 2020

Expat tax change from 1 March 2020: Treatment of taxation on foreign remuneration
by Fanus Jonck | Feb 7, 2019 | Migration news, News

Expat tax change from 1 March 2020: Treatment of taxation on foreign remuneration
At the moment there is a tax exemption in place for South Africans: If you are out of the country for 183 days or more with at least one trip of 60 consecutive days (not applicable for crews of ships), then foreign income earned while outside of South Africa is exempt from tax in South Africa. This is in terms of Section 10(1)(o)(ii) of the Income Tax Act, 1962 (Act No. 58 of 1962). This exemption is still in place, but the South African Revenue Service (SARS) has indicated that from 1 March 2020 this exemption will only apply up to a maximum of R1 million in earnings. This is the only change: A cap was introduced on this exemption.

Therefore, if you work abroad and earn R100 000 per month (R1,2 million per year) the maximum amount that would potentially become taxable is R200 000. There are however a number of other tests and/or factors to take into account.

Tax residency test
The test for tax residency is that any individual who is ordinarily resident (defined in common law) in South Africa during the year of assessment or, failing which, meets all the requirements of the physical presence test will be regarded as tax resident. A person is regarded as being ordinarily resident in the county where his or her primary home is and driven by intention, employment, location of personal belongings and where their family is situated. If ordinary residency cannot be determined, the physical presence test is a 5-year test of how much time you spend within South Africa. Having South African citizenship, a South African ID book or South African passport does not by default make you a South African tax resident.

For example, if you have sold your house in South Africa and you and the family have moved to New Zealand, you rent or own a house in New Zealand, your kids go to school in New Zealand and you are working there, then it is more than likely you are not a tax resident of South Africa. The new amendment therefore will be of no significance to you, as SARS can only tax non-residents on what they earn from a source within South Africa. You therefore don’t need to financially emigrate to not pay tax.

Double tax agreement protection
South Africa has about 60 double tax agreements (DTAs) with different countries. Most of these agreements were based on the same model, applying the rule that the country in which the taxpayer worked for 183 days or more per year would normally be the country with the rights to tax the employment income. Therefore, if you work outside of South Africa – in a country that South Africa has a DTA with – for more than 183 days, then your employment income is not taxable in South Africa because of this DTA protection.

For example: Mrs Jordaan and her husband go work in Germany for 18 months. They keep their house in South Africa and are in Germany temporarily, with the intention of returning to South Africa and are therefore tax residents of South Africa. In terms of Section 13 of the DTA we have with Germany and because they are there for more than 183 days, the income is only taxable in Germany. They don’t have any tax due in South Africa and the change will not affect them.

Foreign tax credits
Any foreign tax you pay would also be credited against your South African tax. For example: During the 2020/2021 tax year you work in France for 4 months, where you earn R800 000 and 15% tax is deducted. You then go work in Belgium for 6 months, where you earn another R800 000 and 20% tax is deducted. Your total foreign income would be R1,6 million and you would have paid R280 000 in tax. Because you are tax resident, your foreign income above R1 million will become taxable and therefore R600 000 of your earnings become taxable. The tax due in South Africa would be ± R179 000. You have already paid R280 000 in tax, so there would be no further tax due.

Who will be affected?
The new amendment will affect the following persons:

A South African tax resident working temporarily abroad and who earns more than R1 million while working in a country which does not have a DTA with South Africa and does not have enough tax deducted; and
A South African tax resident working temporarily abroad, earning more than R1 million and working in several countries (not more than 183 days in any of them) and not having enough foreign tax deducted.

SA Economy on the Brink

South Africa’s outlook has been dealt several heavy blows this week following Eskom’s financial results, and the latest unemployment data, which has raised the question: where to from here?

South Africa’s unemployment rate climbed substantially in Q2 2019, StatsSA said on Tuesday (30 July).

The Quarterly Labour Force Survey for Q2 2019 showed that the unemployment rate increased by 1.4 percentage points from 27.6% in the first quarter of 2019 to 29% in the second quarter of 2019.

Eskom, meanwhile, reported a record loss for the year ended March 2019, of R20.7 billion, following years of corruption that has seen the power utility’s debt spiral out of control, fuelling rumours that international ratings agency Moody’s could downgrade South Africa’s sovereign debt to junk status.

Analysts had hoped for a turnaround in fortunes following the election of president Cyril Ramaphosa, and post the general elections in May. However, the country has been dealt one body blow after another, raising serious questions about its turnaround prospects and timeframe, which seems to get further away as both global and local financial institutions narrow economic growth.

The reason why the state’s finances finds itself in such a death-defying spiral, according to chief economist at Efficient Group, Dawie Roodt, is because, especially since 2009, state spending has increased relentlessly at a time when tax collections collapsed – mostly because of a faltering economy.

“At this rate of debt increase, it is very clear things will turn out very unhappy, very soon,” he said.

Roodt said an investment note that to fix the problem of collapsing fiscal accounts, a combination of three things needs to happen to stabilise the debt to GDP ratio.

“The first thing is that the economy should preferably start growing at a rate of 6%, at which rate the debt to GDP ratio will stabilise.”

“Unfortunately, the ruling elite seems to be hell-bent on doing even more damage to the economy with all sorts of silly socialist ideas, like the suggested creation of yet another state bank, a new mandate for the SARB and the unaffordable NHI. Because of this, economic growth, believe me, will not save us from this fiscal cliff,” he said.

A second option is to increase taxes by the equivalent of 5% of GDP (current market price), which is approximately R250 billion. For example, VAT needs to increase by more than 11 percentage points to get this kind of money, or personal income taxes need to increase on average by nearly 10 percentage points.

This option, Roodt stressed, is irrelevant as a tax increase of this magnitude would have a huge adverse effect on growth, while overburdened taxpayers would likely revolt.

“Preferably, and the only realistic option left, is to cut state spending with a similar amount: R250 billion,” Roodt said.

“Percentage wise that is a real reduction in state spending of approximately 15%, or 20% in nominal terms. Now, show me the politician with the clackers to go and give COSATU the good news. But even if we could implement such austerity measures, the initial impact on the economy will be hugely negative – damned if you do, damned if you don’t,” the economist said.

Roodt also delivered a scathing assessment of president Ramaphosa.

“Judging from president Ramaphosa’s actions so far, he must either be weak, doesn’t appreciate the danger in which the South African economy is, or he simply doesn’t care,” Roodt said.

“I think we have a weak president that simply doesn’t have the political capital to implement unpopular structural changes. All that is left for him to do is to use (gutted) institutions, like the NPA, to do the heavy lifting for him. He is playing the “long-game”, but this economy doesn’t have a long time.

“Even if we can somehow wave a magic wand and get rid of all the corruption and incompetence in the state and SOEs overnight, the perilous condition of the state’s finances will need an extraordinary attempt to save us from further economic collapse,” Roodt said.

Roodt said that none of his three scenarios will likely prevent the inevitable:

“Debt will continue to balloon, the economy will falter, poverty and unemployment will keep going up and those that are responsible for all the troubles will keep on blaming “the others” for their absurdities”.

“By then the only remaining alternative will be to inflate your debt away. But for that to happen you need to control the SARB – and with Lesetja Kganyago at the helm, that is not going to be easy. But be assured, as we sink further into this debt chaos the pressure on the SARB will become relentless and eventually also the SARB will buckle under the pressure. And then, inflation.”

“What we must understand,” Roodt said, “is that no structural adjustment, no new dawn, no fresh start can be taken seriously unless it includes an admittance that there are just too many trying to live off too few. Many tens of thousands of civil ‘servants’, including those at SOEs, are simply not needed. They must go.”

Top ten SARS trends

Article published on news 24 at https://www.fin24.com/Money/Tax/10-tax-trends-sars-is-clamping-down-on-20190701

Tax season 2019 officially opened on Monday July 1 for taxpayers who use the updated digital channels, namely eFiling and the SA Revenue Service MobiApp. This year, SARS is clamping down on non-compliant taxpayers – with the following 10 trends in the spotlight.

Outstanding or late returns

Outstanding returns and late returns remain a concern and SARS says it will step up its enforcement of penalties in this regard.

Rental and Capital Gains Tax

“Many taxpayers still do not declare rental income from properties and we will improve our data matching in this regard by collaborating with the Deeds Office.

“This matching will also allow us to better enforce non-compliance in the declaration of Capital Gains Tax,” says SARS.

Commission

SARS will renew its focus on monitoring income and expenses from commission earners.

Trusts

SARS is concerned about the accuracy of declarations of distributions to and from trusts to the beneficial recipients.

Refunds

“We have also noticed tax preparers unethically promising taxpayers that they will secure a refund. They then look for opportunities to understate income or overstate expenses,” says SARS.

“This is a serious offence and could result in criminal charges as well as financial consequences for the taxpayer who remains accountable to SARS for their submissions.”

Fabricated expenses, IRP5s

SARS has noticed a trend of fictitious refunds being claimed for fabricated expenses and losses, as well as fictitious employers generating IRP5s for the sole purpose of claiming refunds.

Multiple returns

Fraudsters file multiple returns to create refund opportunities and syndicates re-use IRP5s across multiple individuals.

Risk modelling

SARS is working hard to improve the integrity of its profiling capability by using sophisticated risk modelling and expanding our data set.

Last year SARS prevented over R8.2bn fraudulent returns from being paid.

Prosecutions

SARS is currently working with both the SA Police Service (SAPS) as well as the National Prosecuting Authority (NPA) to criminally prosecute fraudsters.

SARS has already successfully convicted a number of taxpayers for non-compliance. It has even successfully convicted some of its own staff for colluding with taxpayers.

The super-rich

“We are instituting a renewed focus on high net worth (HNW) Individuals who often arrange their affairs in complex ways, often presenting higher compliance risks to SARS,” the revenue agency said.

Great Escape – Your Climate Change Survival Plan

Great Escape – Your Climate Change Survival Plan

Unless you’ve booked passage to Mars, it’s time to consider the unimaginable

Written by Starre Julia Vartan – https://medium.com/@thecurioushuman

Three-quarters of the world’s megacities sprawl seaside. More than 40 percent of Americans live in oceanside counties. The National Oceanic and Atmospheric Administration projects that number will increase, even while the seas rise an estimated 20 feet over the next 80 years. Efforts to erect sea walls and implement massive pumping systems are underway in some locales, but even with those measures in place, tens of millions of people will be displaced.

Where will they all go? Most will go inland, of course, and maybe a few will join Elon Musk on Mars. But increasingly, technologists are envisioning off-land human societies—on the water, underwater, and in the air—and they’re developing the technologies that will allow it to happen.

None of this is to downplay the havoc being caused by climate change (or to suggest we should be less diligent about mitigating it), but as legendary sci-fi author Kim Stanley Robinson, whose recent novel New York, 2140 depicts a permanently flooded but still-vibrant Manhattan, says, “It’s important to stay positive about the future, no matter how messed up things are now.”

In that spirit, here’s a look at the new communities we can — and may have to — create.
Seasteading

In January 2017, a startup called Blue Frontiers made an agreement with French Polynesia, a nation that may lose a third of its islands to rising seas by the end of the century. The deal called for the company to build an artificial island (aka a seastead) hosting 300 homes, setting aside 25 percent of the spaces for Polynesians and creating what Blue Frontiers calls “the world’s first environmentally restorative community.”

That’s more than just a nod at sustainability — part of the seastead design process considers the local ecosystem and works toward minimizing environmental impacts, with rainwater harvesting, seabed monitoring, built-in composting, and, of course, renewable energy to power it all.

“Seasteads could be the technology for startup societies. It’s a Silicon Valley sensibility brought to the problem of governance that doesn’t get any better.”

What will this community look like? Picture a connected set of floating platforms, each of which supports a house or group of houses with balconies galore, connected by bridges and walkways and topped with green roofs.

Seasteading as a concept is still in its early stages, and working with existing countries are part of what Joe Quirk, president of the Seasteading Institute, a nonprofit think tank whose research inspired the Blue Frontiers project, calls “strategic incrementalism towards autonomy.” In time, he hopes the developments will become independent nation-states, with systems of governance left up to the people who found them. “Seasteads could be the technology for startup societies,” Quirk says. “It’s a Silicon Valley sensibility brought to the problem of governance that doesn’t get any better.” (That’s certainly how they’re hoping to fund the pilot project. The public presale of Varyon, a cryptocurrency to fund Blue Frontiers, ended on July 14.)

Right now, the technology exists for building a floating city in shallow waters, but what about a new mid-ocean community completely cut off from both an existing landmass and a sovereign government? “The fundamental challenge with [seasteading on] the high seas is waves, and the cost of stability in waves,” Quirk says. “The technology is available, but it’s expensive.”
Floating Pavilion, Rotterdam, Netherlands. Photo: Xavier TESTELIN/Getty

At present, that technology takes the form of the Floating Pavilion in Rotterdam, built by Dutch engineers to show how floating architecture works, as well as oil platforms and the Office of Naval Research’s Floating Instrument Platform (FLIP). The interiors of the FLIP rotate, and the vessel literally flips from horizontal to vertical to keep everything remarkably stable, even in 40-foot waves. This idea could be updated to allow for mid-ocean seasteading.

To be independent, any future ocean-based society will need to harness resources in order to maintain the technology keeping it afloat. That’s where Blue Revolution Hawaii comes into play. Both a book and a project by Patrick Takahashi, a biochemical engineer and director emeritus at the Hawaii Natural Energy Institute, Blue Revolution works “hand-in-hand” with seasteading, but its focus is less on governance and more on creating systems powered by ocean thermal energy conversion (OTEC).

This energy concept has been around since the Carter administration and utilizes the four-degree Centigrade difference between the ocean’s surface and deep-ocean temps. Takahashi says OTEC could easily power a self-sustaining city, complete with next-gen fisheries and on-site water desalination (a notoriously energy-intensive process). In Takahashi’s vision, there would be plenty of energy left over to create exportable, sustainable fuels, so the community would also have an income source. For instance, OTEC could be used to power a kelp plantation “to produce methane or a biomethanol product, or hydrogen from hydrolysis of water,” according to Takahashi.

First, though, some billionaires are needed. The technology is there, but the Pacific Ocean International Station, the first proposed step toward an OTEC-based energy system, will cost in the neighborhood of $1.5 billion — which the group is actively seeking.
Deep-Water Living

A lot has been made of so-called underwater hotels, but most are really just a lower-level room a few feet below the surface — more like a beneath-the-waves basement than the basis of an underwater society. Jules’ Undersea Lodge, however, is different. To get to it, you have to scuba dive 21 feet deep into a Florida lagoon.

Based in a decommissioned research lab called La Chalupa, the lodge was designed by undersea-living pioneer Ian Koblick, who is also the president of the nonprofit Marine Resources Development Foundation and author of Living and Working in the Sea. Koblick has lived underwater several times for up to three months and was one of the first people to live on the edge of the continental shelf, which he did for several weeks off St. John in the U.S. Virgin Islands in 1969. He calls it a “huge adventure,” and says he and the scientists who worked there went into it without knowing “if it was going to pan out or not — and we weren’t sure of whether you’d have long-term physical problems” from living underwater. Luckily, they didn’t.

When it comes to long-term subaquatic lifestyles, Koblick is the realist and Jacques Rougerie is the dreamer. Rougerie, who has also lived underwater for long stretches, once spending 71 days in La Chalupa in 1992, is a French architect who cites Jules Verne’s Nautilus and Jacques Cousteau’s Calypso as inspirations for his beautiful organic structures of future underwater living, from insect-like underwater rooms that together form a village, to a manta ray–like ship that can explore the deepest ocean abysses, to a renewably powered underwater lab that can house eight scientists called SeaSpace. He’s thought about necessities, too, like a sea farm that would allow deep-sea denizens — he calls them “Meriens” — to grow produce underwater, supplementing their diets of more readily available kelp and fish.

Some of Rougerie’s other creations are hybrids, with a portion of the design sticking up out of the water and the rest below, like the SeaOrbiter International Oceanic Station. Rougerie calls it a “slow-pace drifting vessel.” This design, inspired by seahorses, is neither tethered to the ocean floor nor powered to move; instead, it wanders with ocean currents. This low-power design would allow for solar or wave power to keep living systems going, since locomotion would be incidental.

For now, Rougerie’s ideas are still just that. Many would depend on advanced materials that don’t yet exist to deal with the realities of undersea living — a problem Koblick is all too aware of. “You see in these architectural renderings [of undersea structures], they always show these huge glass domes. They don’t realize someone has to be out there cleaning the dome every day or you won’t be able to see out of it in a week,” he says. “You’re liable to get mussels and algae and everything that grows on coral or rock growing on the glass.”

As much as Koblick loved his time underwater, he also appreciates the importance of natural light. He says that one of the “most memorable moments of my life” was when, after three weeks of living on the bottom of the sea, under its hazy light and cold temperatures, “we came out of decompression and saw the gorgeous palm trees waving, the blue sky, white clouds, and big sun.” There’s something to be said for living on the land after all.
Up in the Air

In his book New York 2140, author Kim Stanley Robinson writes about “sky-living in sky villages,” with small, self-sustaining farming communities floating through the air attached to balloons. To Robinson, the upside of this arrangement is clear: “To be on a stable floating village platform at about 10,000 feet would be really a great view all the time,” he says.

The downside: increasingly powerful storms — which are expected due to climate-change impacts.

That’s why the best bet for sky-living might be a more itinerant existence. Like Rougerie’s SeaOrbiter, a drifting approach could be a way to deal with atmospheric changes and winds without expending energy to fight it. “It is not easy [for a balloon] to stay in one place,” says Lodovica Illari, a senior lecturer in meteorology at MIT’s Department of Earth, Atmospheric, and Planetary Sciences (EAPS). “The atmosphere has very few stagnant points.” This is why most designs for airborne habitats involve balloons, which allow whatever’s attached to (or inside) them to go with the flow.

“With food and energy provided, [balloon-borne sky villages] would be a kind of wandering life with lots of possibilities for visiting places below; a kind of combination of travel and being at home in a small village.”

With a little help from an interface called the Float Predictor, designed by Illari and her colleagues, a balloon traveler can input where they want to go and the program will forecast which is the best day and time to catch the appropriate wind. In this way, it might be possible to slow-travel the planet, sailing along on the fingers of a jet stream.

Float Predictor was developed as part of the Aerocene project, with Argentinian artist/philosopher Tomás Saraceno. He wants to leave behind the violence of the Anthropocene — the geological era defined by human beings’ defilement of the planet — and usher in what he calls the “Aerocene…an era of ecological awareness, in which we learn to float together, live together in the air, and come to an ethical commitment with the atmosphere and the planet earth,” as Saraceno puts it in a TED Talk.

Whatever you think of Saraceno’s utopian vision, his thinking has some practical antecedents: When in residence with the French space agency CNES, he became acquainted with montgolfière infrarouge (MIR) technology: balloons powered by solar radiation from the sun and infrared radiation from the earth, which have been used since the 1970s by scientists taking air samples in the stratosphere. With no motors and no electronics needed to keep them operating, these simple balloons have proven longevity — one stayed aloft for 72 days. And they can scale, says Bill McKenna, a researcher at MIT’s EAPS who worked on the Aerocene project. The larger these balloons are, the more they can lift, and “with the technology that exists, they can lift quite a bit — as long as they stay clear of tall clouds below,” McKenna says.

Robinson suggests that solar energy, easily accessible in the sky, could provide such a floating village with plenty of power, enabling sky villagers to “do agriculture in some compact, intensive way,” he says. “With food and energy provided, it would be a kind of wandering life with lots of possibilities for visiting places below; a kind of combination of travel and being at home in a small village.”

Saraceno stresses that his ideas will inevitably run up against conventional notions of boundaries and borders, both horizontal and vertical. The troposphere (the atmospheric level we live in that’s below the stratosphere) is heavily regulated — both for strategic political and military reasons and the safety of plane passengers. However, McKenna says, the “stratosphere is more open to experimentation.”

Once you get into the stratosphere, of course, you’re above the clouds — and most weather. But then you’re too high for humans to live without being enclosed in a pressurized space. So the sweet spot for humans who might live in the skies would likely be heights of 7,000 to 10,000 feet, where most people are comfortable after some adjustment. There will still be weather to contend with, and McKenna points out that there are all types of no-fly areas out there. But perhaps, in time, navigating around or over them might be just another part of reexamining how we live.

Written by Starre Julia Vartan – https://medium.com/@thecurioushuman