Banking, Money and Taxes in South Africa
The currency in South Africa is the South African Rand, abbreviated as ZAR or R. The Rand is subdivided into 100 cents.
One and two cent coins are no longer in circulation in South Africa, although on the plus side stores will give you the benefit of this. For example, if an item costs R9.98 and you pay with a R10 note, you will receive a 5c coin in return. Retail stores won't have trouble giving you whatever change you need, although street hawkers and small corner stores might battle to break large notes.
Notes: R10, R20, R50, R100, R200
Coins: 5c, 10c, 20c, 50c
Banking in South Africa
The four major banks include ABSA (owned by Barclays Bank), First National Bank, Standard Bank and Nedbank. Private banks generally offer a slicker service and more professional advice and include Investec and Rand Merchant Bank (RMB). Banks are generally open from 8:30am to 3:30pm Monday to Friday, and till 11am on Saturdays, although those in airports often have extended hours. All four have good online and cellphone banking systems for customers' day-to-day banking needs.
Visa and Mastercard are widely accepted in South Africa. American Express and Diner's Club are accepted in major centres and tourist spots but are often not accepted outside of these.
ATMs and automatic tellers are plentiful throughout the country, and the systems are the CIRRUS and NYCE. All four of the main banks have their own ATMs, although you might certain brands lacking in smaller towns. You can use any of the four no matter which bank you belong to, although fees will be slightly higher if you withdraw from other banks' ATMs. ATMs and tellers are used for both debit and credit cards, but most have a withdrawal limit of R2,000 to R4,000 per day – generally speaking, it is unwise to carry amounts larger than this around with you anyway.
Bureaux de change are plentiful in cities. Furthermore, all bank ATMs have a drop-box facility whereby you can drop in a cheque or cash and your account will be credited accordingly. The four main banks also provide facilities to make some bill payments or cellphone airtime purchases at their ATMs.
Bank accounts in South Africa
It is relatively easy to open a bank account if you are over 18, can provide a proof of ID (usually a passport) and proof of address in South Africa. However, expats may find it difficult to open a credit account without a South African credit record. For this reason most foreigners open an international bank account before they leave for South Africa.
If your bank has an international presence, such as HSBC, Lloyds, NatWest or Barclays, you will find it fairly easy to make the necessary arrangements. Some banks with an international presence, such as Investec and Old Mutual, are actually based in South Africa.
South Africa has currency control restrictions which your bank should explain. All money transferred into South Africa can be repatriated, so it is important to keep a record of transactions.
You can also consult with your bank about your offshore account options. Many expats choose to keep a bank account open at home for mortgages and other bills, open another account in South Africa for living expenses, and open a third offshore account for savings and for financial security.
Taxes in South Africa
For tax purposes, it is usually more favourable for expatriates to remain as non-residents in South Africa. Due to the introduction of capital gains tax in 2001, any capital assets can be taxed as long as an expatriate is regarded as a resident, even if the assets are situated overseas and remain unsold. Residents are taxed on their worldwide income, whereas non-residents are only taxed on their South African-based income. This includes taxation on rent from property assets in South Africa, interest from loans used or applied in South Africa, salaries and any compensation for services rendered within the country.
An expatriate will be taxed on their worldwide income if they are in South Africa for
- 91 days or more in aggregate during the year of assessment, and
- 915 days or more in total during the preceding five years of assessment, and
- 91 days more in aggregate in each of the preceding five years.