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Tax clearance certificates

05 June 2013   (9 Comments)
Posted by: Author: Aucamp Scholtz Lubbe
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Author: Aucamp Scholtz Lubbe

A tax clearance certificate (TCC) is a document issued by SARS confirming that the applicant’s tax affairs are in order.

TCCs are required for tender applications, to reflect "good standing”, for foreign investment, and for emigration purposes.

The Tax Administration Act, which came into effect on 1 October 2012, contains requirements and time frames for the issue of tax clearance certificates. SARS has also issued guidelines in this regard.

TCCs pertaining to tenders and "good standing” are of particular importance for many of our clients since these TCCs are often required by businesses in order to bid for a tender or render a particular service. Following is a brief overview of the application process and requirements relating to these two types of TCC.

In any application for a TCC, for whatever purpose, the reason for the application must be properly stated. The TCC is only valid for one year from the date of issue, provided the taxpayer remains compliant with SARS requirements. The proviso confirms that SARS is entitled to withdraw a TCC at any time if it was issued in error or if it was obtained on the basis of fraud, misrepresentation or non-disclosure of material facts.

SARS requires certain conditions to be met before a TCC is issued. These conditions are that:

  • the taxpayer must have registered for income tax prior to applying for a TCC;
  • the taxpayer should have no outstanding debt for any taxes (including income tax, Value Added Tax (VAT), dividend tax, administrative penalties and employees’ tax);
  • any deferred arrangements made are being adhered to;
  • all returns and/or declarations are up to date and in the process of being assessed by SARS;
  • all tax reference numbers must be active and correct, e.g. the tax reference number must not be deregistered or suspended on the SARS system; and
  • the registration details on the application form (TCC-001) must correspond with the information on the SARS system.

It is important to bear in mind that SARS has 21 business days following the submission of an application to issue or decline a TCC and that, to be on the safe side if one is in a hurry, the full period should be allowed for. It goes without saying that, to avoid an application being declined, one should be 100% sure that one’s tax affairs are indeed in order before applying for a TCC. 

Comments...

Patrick Molepo says...
Posted 13 June 2013
I think tax practitioners must be able to print TCC on efiling.Same would make the process easier and user friendly.
Jennifer Lopes says...
Posted 11 June 2013
@Victor Terblanche - a client can sign a general power of attorney to allow you to go and sit for a bit in the SARS office in his place - that's what we do for our clients here.
Teresa C. Wolmarans says...
Posted 11 June 2013
I have read all the comments below and agree with all of them. I don't even know why SARS has the option to apply for a TCC online because you just don't get one. It is my experience that you are better off going into the SARS branch and applying there when you can wait 5 working days and go back and pick it up. Who has the time to waste at the SARS office though?
Craig S. du Plessis says...
Posted 11 June 2013
The TCC process is a JOKE. The online system is even more of a JOKE. I have been told that the TCC takes 3 workings days from SARS East London, 5 working days from the SARS call centre and now I see 21 workings days. If SARS have spent millions of taxpayers money to revamp their systems why does it take so long to issue a TCC. SARS need to realise that delays like this only further the slow breakdown of the SA economy. I wonder if they realise that the more business is done in SA the more money they get. Let us all keep on pushing, complaining and bringing to task SARS until they improve the TCC system.
Marchelle L. Ludlow says...
Posted 10 June 2013
I agree with Victor. Why cant we print a TCC from Efiling? I also understand where Leonora comes from. I have a client who is 100% compliant. However SARS owes them R10***.00 from 2002. We do not have documents or Proof of payment going back that far, SARS says they owe them, will not give a TCC, but will not pay the client unless they can provided a copy of the return and cheque that it was paid with. What is the actual Legal time period to keep documents?
Leonora Parnell (Taylor) says...
Posted 10 June 2013
We applied for tax clearance online for a client who was fully compliant in terms of any statements of account. No monies were outstanding and the latest statement of account did n ot reflect any forms outstanding. Tax clearance was declined. On phoning in we were told that the 1998 (I ask you!!!!!!) was outstanding. As we couldn't request the form online we had to ask the client to go in to SARS. Once we had done that we re-applied only to be declined again. This time it was due to the fact that the client's ID number was still the old green book ID and not the new. Could they not have told the clien this the first time?? This is all so extremely frustrating for all concerned!!!!!
Victor Terblanche says...
Posted 10 June 2013
Why can the approved TCC not be printed from SARS E-filing? SARS does not allow anyone but the applicant to collect the TCC from a SARS branch office. How do you tell the CEO of a blue chip company to sit in a queue for 1 to 4 hours and wait for a TCC to be printed?
Phillene Opperman (Koën) says...
Posted 10 June 2013
I have just done an electronic application for a TCC knowing that the client is fully compliant. The TCC was declined. After further investigation we were told that as the client was de-registered for PAYE we are not to include that reference no. on the application. It was not. A second attempt was made at an electronic application with the same result. CAN SARS NOT SEE WHAT IS ON THE APPLICATION. We have now been told to do a manual application. We are 250km from the nearest branch!!
Rodney R. Dart says...
Posted 10 June 2013
We all know that 21 business days for ANY response by SARS to ANY correspondence etc must make South Africa the laughung stock of the rest of the Western World. No business can survive by responding to a letter, email, electronic submission in only 21 business days. Only SARS can get away with this with their "Do as we say not as we do" attitude

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