By Chris Herbst, Chartered Business Accountant in Practice (CBAP) with CIBA, General Tax Practitioner (GTP) with SAIT, Stellenbosch University. Team registered with SAIT, SAIPA and CIBA.
A foreign employer, a foreign bank or a foreign tax authority will sometimes ask you to prove that you are a South African tax resident before it pays you without deducting its own tax. The document that proves it is a certificate of residence issued by SARS, and individuals apply for it on the RC01 form. This guide explains what the certificate is, who needs one, what SARS checks before it issues one, and how to complete and submit the RC01 so that it is not rejected.
What Is a SARS Certificate of Residence?
A certificate of residence is a document SARS issues to South African tax residents to prove their residence for income tax purposes to a foreign tax jurisdiction that has a double taxation agreement with South Africa. SARS gives this definition on its Guide to Request Certificate of Residence.
What is the RC01 form?
The RC01 Application for a Certificate of Residence (Individuals) is the form a natural person completes to ask SARS for the certificate. Companies, trusts and other entities use the RC02 instead. The RC01 has two pages: your applicant details, and a set of questions on the residence tests, your citizenship, your permanent home and any earlier certificates.
What is an overseas tax relief form?
Some countries do not accept a SARS certificate on its own and instead issue their own residence form, which SARS must stamp and sign. SARS still requires the RC01 to be completed and submitted with that foreign form, according to its guide. The RC01 itself states that it must be completed if you need SARS to stamp a form from a foreign country.
Who Needs a Certificate of Residence?
You need a certificate of residence when a foreign country asks for proof of your South African tax residence before it gives you relief from tax at source. SARS's FAQ for people employed by an overseas company confirms that the country where you render services or earn income normally requires this before it reduces or removes its own withholding tax.
Do South Africans working for a foreign employer need one?
Often, yes. If you live in South Africa and work remotely for a company abroad, the foreign employer may withhold its own country's tax from your salary unless you show that you are taxed in South Africa. The certificate is the proof it asks for. You still declare that income on your ITR12; our guide to foreign employment income explains how.
Do investors with foreign dividends or interest need one?
Foreign brokers and banks may ask for a certificate before applying the reduced withholding rate in the relevant tax treaty to dividends or interest. The income is still declared in South Africa, and our guide to SARS codes 4216 and 4218 covers where it goes on the return.
Is it the same as the CARF self-certification an exchange asks for?
No. A crypto exchange asking for CARF self-certification wants your own declaration of your tax residence and tax number. A certificate of residence is issued by SARS. Exchanges do not normally ask for one, but a foreign platform or counterparty applying treaty relief may.
Do You Have to Be Registered for Income Tax?
Yes. SARS states in its FAQ on income tax registration that the applicant must be registered for income tax, and that a person who is not registered must first obtain an income tax reference number, or the application will be rejected.
What else does SARS check before it issues one?
For the requested period, you must be a South African tax resident and your South African tax returns must be up to date. The guide lists the reasons SARS rejects a request: you are not registered for income tax, the form is incomplete, required returns are outstanding, additional information SARS asked for was not submitted, or the residence tests show you are not resident.
Do outstanding returns stop the certificate?
Yes. Outstanding returns are one of the listed rejection reasons, so file every outstanding ITR12 before you apply. Our guide to the tax compliance status shows how to see on eFiling which returns SARS regards as outstanding.
How Does SARS Decide Whether You Are Resident?
SARS decides residence for individuals with two tests in the definition of "resident" in section 1 of the Income Tax Act 58 of 1962: the ordinarily resident test and the physical presence test. You are resident if you meet either one. The RC01 asks questions on both, so your answers must match your actual position.
What is the ordinarily resident test?
You are ordinarily resident in the country you regard as your real home and return to after travelling. SARS sets out the factors it weighs, such as where your family lives, where your permanent home is and your intention to stay, in Interpretation Note 3.
What is the physical presence test?
If you are not ordinarily resident, you are resident under the physical presence test when you were physically present in South Africa for more than 91 days in aggregate in the current year of assessment, more than 91 days in aggregate in each of the five preceding years, and more than 915 days in aggregate over those five years. Interpretation Note 4 explains the test and the 330-day rule that ends residence under it.
The table below maps the RC01 questions to what SARS is testing.
- Are you ordinarily resident?: What SARS tests: Ordinarily resident test; What to have ready: Home, family, intention
- 91, 91 and 915 day questions: What SARS tests: Physical presence test; What to have ready: Travel dates per year
- Permanent home here or abroad: What SARS tests: Treaty tie-breaker facts; What to have ready: Lease or title deed
- Spouse and children's country: What SARS tests: Centre of vital interests; What to have ready: Where they live
- Earlier certificates: What SARS tests: Consistency; What to have ready: Prior periods issued
Can a certificate make you resident if you are not?
No. A certificate confirms a status you already have under section 1 of the Act. If you have ceased to be resident, SARS will not issue one for that period, and the section 9H exit charge applies on the day before residence ended. Our guide to tax residency in South Africa covers both tests in more detail.
How Do You Apply for a Certificate of Residence With the RC01?
You apply by downloading the RC01 from the SARS website, completing every mandatory field, signing the declaration and submitting it to SARS by email or at a branch on appointment. There is no eFiling form for the certificate itself, but eFiling is where you confirm the two conditions SARS checks first.
Step 1: Confirm your registration on eFiling
Log in to eFiling and open your SARS registered details to confirm that you have an income tax reference number and that your residential address, contact number and email are current. The RC01 asks for the same details, and they should match.
Step 2: Clear outstanding returns
Check your tax compliance status on eFiling. File any outstanding ITR12 for the years SARS lists before you send the application.
Step 3: Complete the RC01
Download the RC01 and complete your tax reference number, ID or passport number, date of birth, South African residential address and any foreign residential address. On page two, answer the residence questions, give the periods you have lived in South Africa, say whether you have a permanent home here or abroad, and list any certificate of residence SARS or another country has issued before. SARS's FAQ on applying notes that the mandatory fields are marked in red.
Step 4: Attach the foreign form, if there is one
If the foreign country gave you its own residence form for SARS to stamp, complete your part of it and send it with the RC01.
Step 5: Submit and keep proof
Email the signed RC01 to the address SARS gives on its guide, with "Certificate of Residence" and your income tax reference number in the subject line, or take it to a SARS branch on appointment. Keep the sent email or the branch reference.
How Long Is a Certificate of Residence Valid?
A certificate issued for a period going forward is valid for one year from the date of issue, so a certificate requested in advance runs from the date of application plus one year. SARS confirms this in its FAQ on validity, which also states that a certificate can be issued retrospectively.
Can I get a certificate for a past tax year?
Yes. SARS can issue a certificate for an earlier period, which helps when a foreign authority asks you to prove residence for a year in which tax was already withheld and you are claiming a refund from that country.
How long does SARS take to issue it?
SARS's guide gives its processing time as 21 business days where the form is complete and no further information is needed. An incomplete form or a request for more information takes longer, so the practical step is to send a complete form the first time.
How Does the Certificate Link to Double Taxation Agreements?
The certificate is the evidence a treaty partner needs before it applies the reduced rate or exemption in its double taxation agreement with South Africa. Without a treaty, the foreign country applies its own domestic rules, and South Africa gives relief through a foreign tax credit where the requirements are met, as the SARS guide explains.
Does the certificate reduce my South African tax?
No. South African residents are taxed on worldwide income, as SARS states in its Guide on the Residence Basis of Taxation for Individuals. The certificate affects the tax the other country withholds. Your ITR12 still declares the foreign income, and any foreign tax that is a credit in South Africa is claimed on the return.
What if both countries say I am resident?
Where both countries treat you as resident, the tie-breaker article in the treaty decides, using factors such as your permanent home and your centre of vital interests. The RC01 asks about these facts for that reason, so answer them as they are.
Common Mistakes With the RC01
Most RC01 rejections come from the reasons SARS itself lists, and each one is avoidable before you submit.
- Applying before you are registered. Register for income tax first and quote the reference number.
- Leaving returns outstanding. SARS rejects the request while required returns are missing.
- Leaving red fields blank. An incomplete form is a listed rejection reason.
- Answering the day-count questions from memory. Count your days from your passport stamps or travel records.
- Sending the foreign form without the RC01. SARS requires both.
- Using an old certificate. A forward-looking certificate lasts one year from issue, so diarise the renewal.
- Applying after residence has ended. If you have ceased residence, deal with your exit year first.
Do You Need Help With Your RC01?
We check your registration and compliance status, clear outstanding returns, prepare your RC01 answers against the residence tests and file the foreign income on your ITR12. See our personal tax plans, read more in our personal tax guides, or book a call with our team.
