New SARS Tax Clearance System

New SARS Tax Clearance System


Editor’s Note: We see this as an important development. A clean status is important for companies in South Africa, but traditionally it has been a cumbersome and time consuming process for companies to confirm their status. This new process should hopefully really help.

SARS is rolling out a new tax clearance system in April 2016. The new system makes use of a dashboard (My Compliance Profile) that reflects real time compliance indicators. These indicators take the form of green and red lights with red lights meaning ‘non-compliance’ and green lights ‘compliance’. The Compliance Dashboard is broken down into:

  • Registration status
  • Submission of returns
  • Debt
  • Relevant supporting documentation

This new system will issue the taxpayer with a pin number which will eliminate the need for the taxpayer to go into a SARS branch to collect a hard copy of the tax clearance certificate and allow third parties to check the compliance status of the taxpayer.

The Tax Compliance Status (TCS) will also provide a full audit trail for taxpayers where it is indicated that they are non-compliant. A taxpayer will be able to see what is outstanding in terms of returns and money for any tax types for which they are registered.

Taxpayers who feel aggrieved will have the opportunity to challenge the compliance status.

It is important to note that all current (valid) tax clearance certificates will become null and void as soon as SARS has implemented Phase 3 (target date mid-April). It is therefore imperative that taxpayers update their eFiling profile to ensure that companies are properly merged and that the TCS and TCS Verification is selected and activated under ‘Rights Groups’ on eFiling.

A ‘Step by Step Guide to the Tax Compliance Status Functionality on eFiling’ document can be downloaded from the SARS website to explain this process in more detail.