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The Interpretation Note states further that a natural person may be resident in South Africa even if that person was not physically presenting South Africa during the relevant year of assessment, and that the purpose, nature, and intention of the taxpayer's absence must be established to determine whether the taxpayer is still ordinarily resident.
It also sets out a list of factors which SARS will take into account determining whether a person is ordinarily resident in South Africa as follows:
• most fixed and settled place of residence;
• habitual abode, i.e. present habits and mode of life;
• place of business and personal interest;
• status of individual in country,i.e. immigrant, work permit periods and conditions, etc.;
• location of personal belongings;
• nationality;
• family and social relations(schools, church, etc.);
• political, cultural, or other activities;
• application for permanent residence;
• period a broad; purpose and nature of visits; and
• frequency of (and reasons for)visits.
The above list is not intended to be exhaustive or specific—it is merely a guideline.
The Interpretation Note also states that the circumstances of the individual must be examined as a whole, and the personal acts of the individual must receive special attention.As stated in ITC 1170,34 SATC 76, one is entitled to look at the taxpayer's life beyond the particular period under consideration.
The ‘physical presence’ test As stated above, in terms of the definition of a ‘resident’ in Section 1 of the Act, a ‘resident’ includes any natural person who is not at anytime during the relevant year of assessment ordinarily resident in South Africa, if that person was physically present in South Africa:
•for a period or periods exceeding 91 days in aggregate during the relevant year of assessment, as well as
•for a period or periods exceeding 91 days in aggregate during each of the five years of assessment preceding such year of assessment, and
•for a period or periods exceeding 915 days in aggregate during those five preceding years of assessment.
It is important to note that in the year of assessment that a taxpayer either ceases to be ordinarily resident in South Africa or commences being ordinarily resident in South Africa, the physical presence test cannot be applied.This is because the physical presence test explicitly only applies if a person was not ordinarily resident in South Africa at any time during the relevant year of assessment.
The effect of the above definition is that a person who is not ordinarily resident in South Africa is, in terms of the physical presence test, a resident after physical presence in South Africa exceeding the above limits over a period of six consecutive years of assessment.
A person who becomes tax resident by virtue of this test will become a resident from the first day of the year of assessment during which all the requirements of the test are met.Accordingly, an individual would become tax resident in terms of this test from the beginning of the sixth consecutive year of assessment in which they have had a physical presence in South Africa exceeding the above limits.
For the purposes of determining the number of days during which a person is physically present in South Africa, a part of a day is included as a day.A day spent in transit through South Africa is not included as a day, provided that the person does not formally enter South Africa through a "port of entry" as contemplated in section 9(1) of the Immigration Act, 2002.
Where a person who is a resident in terms of the physical presence test is physically outside South Africa for a continuous period of at least 330 full days immediately after the day on which such person ceases to be physically present in South Africa, such person is deemed not to have been a resident from the day on which they ceased to be physically present in South Africa.Practical example for individuals wishing to lose their ‘resident’ status.