SARS has recently sent a communiqué to registered Tax Practitioners regarding applications for tax clearances. Taxpayers have been informed that they will receive an instantaneous response as to whether their application for a tax clearance (tenders or good standing) has been approved, declined or selected for review. Where an application is declined the reasons for this decision will be provided immediately. This will be applicable whether applying via eFiling or at a SARS branch.
SARS states that these improvements are a result of the introduction of a ‘more robust, automated screening process’. SARS believes that this approach is a result of the application of a ‘risk management’ approach rather than a ‘gate keeping’ approach. This new approach now provides SARS with the ability to implement a multi-layered verification process that will reduce the possibility of circumventing tax clearance processes and procedures.
Taxpayers have been advised that when rectifying non-compliance issues at a SARS branch it could take up to 5 working days to determine the compliance of the taxpayer. The process of issuing a tax clearance will begin once the compliance status of the taxpayer is determined. In instances where taxpayers make payments by cheque to rectify any non-compliance, the consideration for a tax clearance will be delayed for a period of 7 days to ensure that the cheque is cleared.
Taxpayers should note that where the registered details applied on the TCC do not correspond with SARS records (e.g. the company registration number captured on the application does not match the company registration number on SARS records for all the tax reference numbers captured on the application), the TCC applications could be declined and will have to be re-submitted. To avoid these unnecessary delays taxpayers must ensure that their registered details are accurate and up-to-date across all the tax types they are registered for at SARS.
SARS has also reminded taxpayers that:
- In order to apply via eFiling, either the Income Tax number or VAT number must reflect on the eFiler’s profile. It is also important to note that the Income Tax reference number remains a mandatory field to complete on the application.
- In considering an application SARS considers all tax reference numbers linked to the legal entity.
- A tax clearance will only be issued to taxpayers if SARS records reflect that the taxpayer is compliant.
- A tax clearance will only be issued in the registered and trading names as reflected in SARS records.
The process of applying for a tax clearance certificate is only onerous if there are unresolved tax matters with SARS. Even though a tax clearance certificate may not be needed at a specific time, it may be prudent to apply for one (good standing) to see whether the entity’s tax affairs are in order. This will reduce the trauma of being informed of various problem areas when you desperately need a tax clearance for business purposes.
Should you have any questions in this regard please contact Dave Beattie on 031 582 7410 or [email protected].