The Guarantees of getting your Australian Visa
We often get asked if we can guarantee that our clients will get their visas. A simple definition of a guarantee is “a promise with certainty”. We realize that if you are spending a small fortune you want some kind of certainty that you will get value for your money. It’s not unreasonable right? If we had a box full of visas we could set one aside one visa and guarantee that our clients would get that specific visa because we have personal control over that visa. Obviously, we don’t have a box full of visas – and therefore we cannot give you that guarantee. The Australian Department of Home Affairs are not in the business of giving guarantees either! The only thing we can say is that:
- our migration agents would not lodge your visa unless we have certainly in my mind at the time of applying that you have met all the criteria, and therefore be reasonably sure that you will get the visa, and
- be very wary of people who give false guarantees in order to attract your business.
The only guarantee we can give is that it will probably cost you a little more than you thought it would and take a little longer than you wanted it to. The rest.. is all in the paperwork!
A comparison of the South African and Australian Economies
It’s sometimes easy to overlook the “bigger picture” because we tend to look at the little facts that have a direct and immediate effect on us and we either choose not to look or are ignorant of the bigger issues at stake.
Some points to take into consideration when looking at migrating to Australia:
South Africa’s unemployment rate increased by 0,1 of a percentage points to 29,1% in the third quarter of 2019. Australia’s unemployment rate is holding steady at 5.2 per cent as a surprise job creation bounce offsets an increase in the number of people looking for work.
The Indirect taxation rate in South Africa is almost certainly upwards of 45%, by way of VAT, Petrol levies, taxes etc, although I can’t find an exact figure I suspect that indirect taxation rate in Australia is somewhere between 35 and 40%.
South African annual consumer inflation slowed in September, falling to 4,1% from 4,3% recorded in August.
Australian inflation rate 1.9%.
South Africa – Compared with the 2019 Budget estimates, total revenue shortfall for 2019/20 will amount to R52.5 billion, reflecting a poor employment outlook, with job losses, lower wage settlements, and smaller bonuses, reducing personal income tax collection with the promise of further increased tax rates in early 2020.
Australia – This budget year will see a surplus of $7.1 billion, equal to 0.4 per cent of GDP.
South Africa Economic growth is now projected at 0.5% for 2019
You can’t argue with statistics. Perhaps it’s time to consider investing in Australia?
New Expat Taxes
Following the Minister of Finance’s Mid-term budget speech, a lot of news and attention has been focused on new tax planes for our immediate future.
When leaving South Africa, you don’t leave your tax issues behind, they are tied into your money issues and you cant deal with one, without dealing with the other.
Financial emigration is when you change your status with the South African Reserve Bank (SARB).
Once you have obtained a visa and emigrated from South Africa to Australia and this has become a permanent status, the process of financially emigrating (during which time your financial assets move from South Africa to Australia) takes place.
With the amendments to the Income Tax Act come into effect in March 2020, South African tax residents working and living abroad will only be exempt from paying tax on the first R1 million they earn abroad. Thereafter they will be required to pay tax on any foreign earnings while they are South African tax residents.
The revised act does make provision for South African Expatriates working abroad who are registered for tax in those countries, such as Australia, who have a bilateral tax agreement with South Africa.
In these instances, you will be credited in South Africa with your forging tax payments which are offset against the tax that you will need to pay locally.
South Africans working abroad will, in most instances, not be significantly negatively impacted by the changed regulations and will still not be double taxed.
South African residents who live and work abroad permanently and spend the majority of their time living abroad would already be considered non-residents from a tax perspective.
The downside is that financial emigration is an expensive exercise. There is a huge tax implication involved in changing your tax residency.
By financially emigrating you are deemed to have disposed of all your assets in South Africa, which means that capital gains tax starts applying. Should you decide at some future point to financially emigrate back to South Africa, you would not get that money back.
To avoid South African taxation rules, you would need to first change your tax residency. Financial emigration is the very last step. Even then, it’s not an essential part of an amended tax residency given that it is only an exchange control provision.
Emigration and financial emigration only comfortably overlap when a taxpayer is legitimately emigrating. The latter doesn’t work if the individual intends to continue residing in South Africa.
For this reason, we suggest that your visa strategy, tax plan, physical emigration, and financial emigration be planned as a whole and not in a haphazard way. It needs to be a well thought out strategy with clear goals that you need to be able to achieve. Obviously, the longer you plan for this, the less it will cost you.