The consultants at Breytenbachs Advisory are often asked to what extent South African Exchange Control (Excon) residents may use their credit cards abroad.

Herewith the update rules (29 July 2016) as obtained from the SA Reserve Bank (FinSurv) manuals issued in Circular 7 of 2016.

Whilst living temporarily abroad (outside SA without emigrating formally, albeit as a dual national), Excon residents (i.e. residents not merely on a holiday trip) may use their South African debit and/or credit cards within the single discretionary allowance (SDA) limit of R1 million per adult per calendar year.

Individual Excon residents in possession of a personal South African issued credit and/or debit card are permitted to make online foreign currency payments for small imports ordered over the internet.

Allow us to unpack this: It is mainly for imports, yet airline tickets are allowed. No corporate credit cards may be used and the payment must be in a foreign currency, converted by the card issuer to ZAR, and not exceeding R50 000 on the day of PAYMENT.

Card payments to foreign suppliers are limited to R50 000 per transaction, yet the goods must be imported (sent to South Africa). SA cardholders are not absolved from ad valorem excise and customs duties or from complying with the requirements imposed by customs. Equally, VAT on the importation of goods will be payable.

Before you think of spreading larger payments for larger imports over three days or two weeks, take note of the SARB rule that NO transaction exceeding R50 000 may be split into multiple payments to circumvent the limit applicable to this dispensation.

Online rules also include a total prohibition against the use of SA credit or debit cards to play any Lotto or game of luck on a platform outside SA.

The National Gambling Act (No. 7 of 2004), as amended by the National Gambling Amendment Act (No. 10 of 2008), lay down that Excon residents may not participate in any gambling activities not authorised in terms of the Lotteries Act (No. 57 of 1997).

SA Lotto may be played online using any SA account. Most banks have Lotto and PowerBall on their platforms and, provided you are over 18 and accept payment in the same account, you may play while you are offshore using online banking.

It is therefore important to understand that, in terms of FinSurv rules, Excon residents may not use their SA credit and/or debit cards to facilitate payments to foreign platforms. SARB issued strict instructions to ALL issuers of American Express, Diners Club, MasterCard and Visa cards not to accept such debits against the South African accounts of Excon residents.

Direct and indirect payments through third parties are included in the prohibition on facilitation of payments.

For more information or advice on the issue, please feel free to contact Breytenbachs Advisory at info@bcbadvisory.com or visit our website at www.bcbadvisory.com.

Breytenbachs Advisory is a specialist company dealing with tax and tax related matters on behalf of expatriates settled in South Africa and abroad. Other areas of expertise include the very complex area of cross-border estate planning, formal exchange control, financial emigration and pension transfers.