Navigating the Approved International Transfer (AIT) process: Key insights

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The Approved International Transfer (AIT) process is the required mechanism for both resident and non-resident individuals seeking approval to externalise funds abroad. As this process remains central to cross-border fund transfers, we take the opportunity to recap the key aspects of AIT and the approach taxpayers should take when submitting an application.

Key features of the AIT process

The AIT process requires taxpayers to provide a comprehensive set of information upfront, streamlining SARS’s review and decision-making process. SARS continues to conduct enhanced due diligence on applications exceeding R10 million, but the thresholds for externalisation remain unchanged:

• The R1 million single discretionary allowance does not require SARS approval.
• Transfers above R1 million require an AIT application.

Required supporting documentation

Taxpayers applying for AIT must ensure they have the following supporting documents readily available:

General requirements for all applicants:

• Relevant material demonstrating the source of the capital being externalised.
• A statement of assets and liabilities for the three preceding tax years, including:
  • Disclosure of all investments, loan accounts, and distributions from local and foreign companies, trusts, etc.
  • Separate listing of local and foreign assets and liabilities.

Additional requirements for non-residents:

• Documentary proof that tax residency in South Africa has ceased, including the effective cessation date.
• A detailed Capital Gains Tax (CGT) calculation schedule reflecting any tax payable on deemed disposal of assets as of the day before ceasing tax residency.
• Compliance with restrictions on the transfer of pension and annuity income, specifically the requirement that lump sum benefits may only be accessed after maintaining non-residency for at least three consecutive years.

Additional disclosures (applicable to both local and foreign trusts and companies):

• Whether the applicant is a beneficiary of a trust.
• Whether the applicant is a shareholder of a company.
• Whether the applicant has any outstanding loans to a trust.

Turnaround time and compliance considerations

While the documentary and disclosure requirements are extensive, they contribute to a more efficient application process for compliant taxpayers. SARS currently endeavours to finalise applications within 21 business days, provided that all required documentation is correctly submitted.

Given that the AIT process remains the standard mechanism for international fund transfers, taxpayers should ensure their applications are meticulously prepared to prevent unnecessary delays.

Should you have any questions or require assistance with your AIT applications, please contact Jan Louis Koen at janlouis@asl.co.za.