When the Tax Administration Act (TAA) came into effect on the 1 October
2012, effective record keeping was specifically prescribed and failure
to comply became a criminal offence which can result in fines or even
We have summarised the basics of record keeping:
General requirements of the TAA
Records are defined in the TAA as the records, books of account or
documents that a person is required to keep or retain in terms of the
The record-keeping requirements apply to a person who:
has submitted a return
is required to submit a return for a tax period and has not done so
due to the application of a tax threshold or exemption is not required
to submit a tax return but who, during the tax period, received income,
had a capital gain or loss or was engaged in any other activity that has
a tax effect or would be subject to tax.
3. Records must be retained for a period of five years from:
the date of submission of a return, or
where no return is required, from the end of the relevant tax period.
However, if the records relate to an audit or investigation, or an
objection or appeal lodged against an assessment, the records must be
retained until the audit is concluded or the assessment or decision
becomes final, even if it exceeds five years.
4. The records must be kept in:
their original form
an orderly fashion
a safe place;
or in the form, including electronic form, as may be prescribed by the Commissioner.
Section 30(1)(b) of the TAA and Government Gazette No 787 dated 1
October 2012 specifically prescribes the requirements of electronic
Electronic records are defined in the GG as records kept or stored in
electronic form on a computer or other electronic storage device which
were either originally created in an electronic form, or which were
converted from any non-electronic form, to an electronic form.
The GG stipulates inter alia, that:
there must be adequate storage and back up of the electronic records
the electronic records must be in an acceptable form that satisfies the
standards contained in the Electronic Communications and Transactions
the records must be easily accessible for inspection by SARS at all reasonable times, if required
the records must be kept and maintained at a place physically located in
South Africa, unless otherwise authorised by SARS. However, such
authorisation will only be given if SARS is satisfied that the records
can be accessed from South Africa and that their foreign location will
not impair accessibility of the records.
Section 240A of the Tax Administration Act, 2011 (as amended) requires that all tax practitioners register with a recognized controlling body before 1 July 2013. It is a criminal offense to not register with both a recognized controlling body and SARS.