The South African Reserve Bank’s Financial Surveillance Department has implemented new tax-compliance checks for sending income abroad, including dividends owed to foreign shareholders. These amendments mark a significant shift in the long-standing treatment of non-resident dividend flows.
Overview of the Regulatory Update
On 22 October 2025, the Financial Surveillance Department issued Exchange Control Circular No. 15/2025, introducing changes to section B.3 of the Currency and Exchanges Manual for Authorised Dealers. These changes affect how authorised dealers process outward income remittances to foreign beneficiaries. The revised manual, updated on 28 October 2025, now sets out a new framework regulating dividend transfers to non-residents.
New Tax Compliance Requirements for Dividend Transfers
Under the updated rules, a dividend may only be transferred to a non-resident shareholder once the South African Revenue Service has confirmed the tax status of the recipient. This represents a departure from the previous system, where a non-resident with endorsed shares could typically receive dividends without any additional SARS approvals.
The amended provision requires authorised dealers to obtain one of two SARS documents before processing the remittance:
• For non-residents who are not registered on the SARS database: a Manual Letter of Compliance – International Transfer
• For non-residents already registered with SARS: a TCS – AIT PIN (Tax Compliance Status: Approved International Transfer)
This change effectively introduces a tax-screening mechanism for foreign dividend receipts, ensuring SARS oversight before funds are released offshore.
Transactions Not Affected
The new rules apply to dividends but do not extend to interest remittances. Interest payments may therefore continue to be transferred offshore without obtaining the newly introduced SARS documentation.
However, similar tax clearance requirements have now been imposed for various other categories of cross-border income, including directors’ fees payable to non-residents.
Practical Considerations for South African Companies
Companies with foreign shareholders should carefully assess the implications of the new requirements. Key considerations include:
• verifying whether non-resident shareholders are registered on the SARS system
• determining which SARS compliance document will be required for each dividend cycle
• anticipating potential delays in remittances if SARS approvals are not obtained timeously
The changes introduced by Circular 15/2025 are likely to influence the administrative processes surrounding dividend declarations and payments, making early planning essential for companies with international ownership structures.
