Tax clearance certificates: Compliant taxpayers to receive instantaneous tax clearance notification
05 March 2014
Posted by: Author: SARS Legal and Policy
Author: SARS Legal and Policy
Taxpayers will now be able to receive an instantaneous response of whether their application for a tax clearance for tenders or good standing has been approved, declined or selected for review when applying via eFiling or at a SARS branch. This notification also provides the taxpayer with immediate feedback as to why a tax clearance application has been declined.
These improvements are as a result of the introduction of more robust, automated screening process in respect to the application and granting of tax clearance. These changes see SARS adopting a risk management approach, rather than a "gate keeping” approach to the awarding of a tax clearance for tax compliant taxpayers. The new process 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.
However taxpayers need to note that when they rectify a non-compliance 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.
These new processes are the start of giving effect to the statement by Minister of Finance, Pravin Gordhan in his 2012 Budget Speech that SARS will be strengthening the tax clearance system to ensure that those taxpayers who have defrauded the state as well as those who are not tax compliant would not be able to obtain tax clearances to do business.
Taxpayers should also 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) 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.
Taxpayers are encouraged to use SARS’s quick and easy eFiling process when applying for a tax clearance. Taxpayers must note the Tax Clearance Certificate will still need to be collected at any SARS branch.
Only in exceptional circumstances will tax clearance applications sent by post or fax to SARS be accepted.
Tax Practitioners are requested to remind taxpayers who are their respective clients that:
- In order to apply via eFiling, either the Income Tax 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 order to apply via eFiling
- 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.
For more information on the tax clearance process, taxpayers can go to www.sars.gov.za or contact the SARS Contact Centre on 0800 00 SARS (7277).
Issued on behalf of the Commissioner for the South African Revenue Service.