Breaking News – SARS implements new Tax Compliance Status process: what you need to know

The South African Revenue Service (SARS) has changed its Tax Compliance Status (TCS) process, with the introduction of the “Approved International Transfer” (AIT) application replacing the “Emigration” and “Foreign Investment Allowance” TCS types. These changes were implemented on 24 April 2023. The goal is to modernise the system and keep making it easier for taxpayers to comply with their obligations.

Let’s unpack these changes and take a look at what South Africans already living abroad (or in the process of planning their international relocation) need to know.

Tax Compliance Status application form: what’s changed?

An updated Tax Compliance Status (TCS) application form has been implemented which:

• Merges the Foreign Investment Allowance (FIA) and Emigration applications into a single form known as the “Approval International Transfer.”
• Removes the Tender option and brings all other tax compliance status verification scenarios under the ambit of the Good Standing Tax Compliance Status (TCS) option.

However, before non-residents can request a TCS, it is important to have completed the SARS Cease to be a Resident process.

Tax Clearance: Certificate vs PIN

In 2015, SARS replaced the paper-based Tax Clearance system with the Tax Compliance Status System. Upon application, a security TCS PIN is issued to the individual taxpayer, allowing third parties to view the taxpayer’s overall tax compliance status via eFiling, in real time. To protect confidentiality, no other information can be accessed using this TCS PIN.

The TCS system can now be used for the following applications:

• Good Standing (also used now for tender purposes)
• Approval International Transfer (for using the foreign investment allowance and emigration)

To obtain your TCS PIN and allow third parties to verify your current tax compliance status, you need to access the TCS system via the Tax Status menu option on eFiling or the SARS online query system (SOQS). The Approval International Transfer application is available for both residents and non-residents.

Benefits of the TCS PIN-based system: it gives recognition to the fact that an individual’s tax compliance status is dynamic, and requires maintenance on the taxpayer’s part.

Supporting Documents required to obtain Approval of International Transfers (AIT) clearance

You can now request your Tax Compliance Status from SARS here. The new Approval International Transfer Application now requires that when you apply for a Tax Compliance Status PIN in respect of international transfers, you submit the following supporting documentation:

• Documents verifying the source of capital to be transferred/invested
• Statement of assets and liabilities (local and foreign) covering the past three years
• Proof that the individual has ceased to be a tax resident (where applicable)
• Specifics relating to locally-listed securities;
• Power of attorney if the TCS application is submitted on a taxpayer’s behalf.

What do I need to do before I seek Approval of International Transfers (AIT) clearance?

With this in mind, in order undertake your TCS application successfully, to verify your tax compliance or gain approval to make an international capital transfer, you must ensure that:

• You have no outstanding income tax returns that need to be filed.
• You have no outstanding debt with SARS, unless a payment arrangement has been made or a suspension of payment agreed to.
• You are registered for all the tax products that apply to you.
• Your registered personal details are up to date.
• You have consolidated your registered tax reference numbers either through the Merge tool on eFiling or by declaring them on the ERC01 form, which is available as part of the Tax Compliance Status (TCS) process on eFiling.

SARS is all about making compliance easier

The Tax Compliance Status (TCS) system includes a feature called “My Compliance Profile (MCP)”, which allows taxpayers to view their compliance status online based on specific requirements set by SARS. This feature helps you identify any areas of non-compliance and take corrective action. The MCP provides more information about tax compliance, which is used to determine their overall compliance status when you apply for a TCS, such as for Good Standing.

FinGlobal: South African tax specialists for expats

Need expert assistance with tax compliance, clearance or tax refunds? We can assist. No matter how complicated your tax circumstances are, FinGlobal can assist with simplifying and clarifying your tax position, getting you up to date and square with SARS.

To find out how we can help with your tax headaches, leave your contact details in the form below and we’ll be in touch.