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What You Need to Know About Changes to the Tax Clearance System

Posted 23 February 2016 under Tax


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Tax compliance makes its way into many aspects of life and business. Perhaps you’re considering applying for a tender, or for a foreign investment allowance to move funds offshore, or even looking to emigrate and leave our shores. These are just a few examples of instances where you may be asked by a third party to provide a Tax Clearance Certificate.

And until now, the course of action to obtain your certificate has been a tedious one.

Upon request, SARS would check its records and verify that the taxpayer had filed all required tax returns, paid all taxes, penalties and interest due, before releasing a Tax Clearance Certificate confirming a good standing. This was a mostly manual and, therefore, time-consuming exercise. Not to mention that in order to collect your certificate, you had to endure the inevitably long queue at your local SARS branch.

But that’s all about to change!

SARS has recently announced a progressive change to their system, which will come into play mid-April 2016 and ease many administrative and logistical headaches around tax clearance.  

The Changes to SARS Tax Clearance System

Firstly, the naming convention has changed from Tax Clearance Certificate (TCC) to Tax Compliance Status (TCS). This more accurately reflects the enhancement of moving the system from a ‘point in time’ check to a real-time verification of current compliance.

 

Old Tax Clearance Certificate (TCC)

New Tax Compliance Status (TCS)

Application

Apply online via SARS eFiling or manually in person at branch

Apply online via SARS eFiling

Period of Validity

12 months

Real-time, current status

Waiting Period

48 hours (eFiling)  to 21 days (manually)

Instant access

Proof

Hardcopy certificate, collected from SARS branch

Compliance Clearance Pin (CCP) generated for online check by third parties

Printable certificate - TCC - available (with electronic verification)


The fact that manual human intervention has been phased out with this approach helps to drastically reduce the turnaround time and minimise risk of potential fraud. The added bonus, of course, is that the introduction of the online compliance clearance pin means that in-person visits to SARS to collect paper certificates are no longer necessary.

When Could TCS Be Declined?

As a taxpayer, it’s important to understand what SARS considers when evaluating tax compliance. Here are a few common situations to avoid if you’re looking for a clear TCS.

  • Your TCS application wasn’t signed by you, the taxpayer, or your duly authorised representative
  • Your taxpayer status reflects as inactive or deregistered
  • You owe money to SARS (typically more than R1000) and haven’t made a special payment arrangement with them
  • You’ve made a special payment arrangement for outstanding money, but have not honoured the payment schedule
  • You’ve got outstanding returns, and no acceptable arrangement has been made with SARS for the submission


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Hi, I'm Tim!
I'll help you do your Tax Return with Confidence
Quickly, Easily
And Correctly
Do your Tax Online with Expert Help from Me, Step-by-Step.
LEARN MORE