Tax Clearance Certificates

When applying for tenders, contracts and Requests For Quotations in South Africa, a Tax Clearance Certificate (TCC) may be required. A Tax Clearance Certificate is essentially a piece of official documentation that serves as proof that your business has no outstanding tax at SARS. Having a Tax Clearance Certificate in South Africa means your business is in good standing and is essentially a form of administrative security to ensure you don’t have bad debt with SARS, at the date of issue of the certificate.

A TCC may be required for any of the following reasons:

• Tender applications
• A new business or government contract
• Proof of good standing
• Foreign Investment Allowance (individuals only)
• Emigration (individuals only).

Requirements to be tax compliant:

To be tax compliant, you should ensure that you are registered for all the required tax types, have submitted all your tax returns timeously and have paid all your outstanding taxes on time.

How do I obtain a tax clearance certificate?

There are currently three ways to obtain a tax clearance certificate:

• Visit a SARS branch and have SARS assist you to complete an application form.
• Apply for a tax clearance certificate online via the Tax Compliance Status (TCS) system under your SARS eFiling profile.
• Consult with a registered SARS Tax professional.

What is the Tax Compliance Status (TCS) system?

The Tax Compliance Status (TCS) system replaced the Tax Clearance Certificate system which was previously used by SARS. Instead of issuing manual tax certificates, the new TCS system allows you to obtain a TCS pin in reatime. You can share this TCS pin and your tax reference number with any person or entity to verify your good standing and tax compliant status with SARS.

How to obtain a TCS pin via eFiling

1. Login into your Sars eFiling profile. 

2. Activate your TCS service. This is a once-off activation step. Once you have activated the service, you will see the “My Compliance Profile” on the screen. 

3. Your compliance status will include the following compliance categories:

• Registration status
• Submission of returns
• Debt
• Relevant supporting documents.

You will either see a red or green tab that will appear next to the above categories. If the tab is green, it means that your tax matters are in order and you are tax compliant.

If the tab is red, it implies that your tax matters are not in order, and you are not tax compliant. Hover your cursor over the red “non-compliant” status indicator for more details on how to change your compliance status and action accordingly. If you disagree and would like to challenge your tax compliance status, select the “Challenge Status” option at the bottom of the “My Compliance Profile” screen.

4. Once your tax affairs are in order (green compliant status), you can request a TCS pin by clicking the “My Compliance Profile” tab, selecting the TCS request option and selecting the type of TCS you would like to apply for i.e., good standing, tender, foreign investment allowance (individuals only) or emigration (individuals only). Complete the Tax Compliance Status Request and submit it to SARS. Your TCS pin should be issued immediately via SMS or email.

Reetesh Balgobind

Assistant Finance Manager 

References

https://www.sars.gov.za

https://www.sarsefiling.co.za/

https://www.findanaccountant.co.za/content_tax-compliance-status, Ascertaining your tax compliance status, by Liza Wood