Did you know the South African Revenue Service (SARS) no longer issue paper-based tax clearance certificates? It’s true! In 2015, SARS switched to the Tax Compliance Status (TCS) system, a digital, dynamic compliance verification system for taxpayers. Although we still refer to ‘South African tax clearance certificates’ in daily conversation, what we really mean is a Tax Compliance Status PIN (TCS PIN) that can be used by third parties to verify the compliance status of an individual or business in real-time.
Confused? You won’t be once you’ve read our handy guide to the SARS tax clearance system.
What is the Tax Compliance Status (TCS) system in South Africa?
SARS has replaced an antiquated paper-based manual system with an improved Tax Compliance Status (TCS) system to simplify taxpayers’ tax compliance process.
Here’s a breakdown of the critical changes that you need to be aware of:
1. One application for multiple scenarios: Previously, separate tax clearance applications existed for Foreign Investment Allowance (FIA) and Emigration. The new system consolidates these into a single “Approval International Transfer” application while removing the “Tender” option. For all other situations where a third party verifies your TCS, you will use the “Good Standing” option.
SARS tax clearance – an essential note for tax non-residents
Before requesting a TCS PIN as a non-resident, ensuring you’ve completed the “Cease to be a Resident” process with SARS is vital.
Read more: Ticking the non-resident box was not enough, expats must confirm tax status with SARS urgently.
2. Updated supporting documents required for SARS tax clearance: The documents for “Approval International Transfer” now reflect recent changes in Foreign Exchange Control and the Taxation Laws Amendment Act (2020).
How does the TCS system work in South Africa?
Having replaced the paper-based tax clearance certificates, taxpayers are now issued a security TCS PIN to authorise third parties to view their online status via eFiling. This provides a view of the tax compliance status at the time of verification, unlike the paper-based certificate, which only verifies tax compliance when issued.
- Authorised third parties use your TCS PIN to verify your compliance via eFiling, but for confidentiality reasons, third parties cannot access any other information with this TCS PIN.
- Compliance status is dynamic and reflects taxpayers’ ongoing adherence to tax requirements.
The SARS TCS system caters to two main tax clearance applications for taxpayers:
- Good Standing: This verifies overall tax compliance.
- Approval International Transfer: This is for residents transferring funds abroad and those who have ceased residency.
How to access the TCS System: You can access the TCS system through the “TAX STATUS” menu on eFiling.
TCS System: what you need to know about maintaining tax compliance
To ensure you are tax-compliant at all times, it is essential to remember the following:
- All owing tax returns must be submitted.
- Any outstanding debts with SARS must be settled or under valid payment arrangement/suspension.
- You must be registered for all applicable tax products.
- Your registered details must be up to date.
Using the SARS TCS System: “My Compliance Profile” (MCP)
The TCS system includes the “My Compliance Profile” (MCP), which provides taxpayers with an online view of their current compliance against specific SARS requirements. This allows you to identify and rectify any non-compliance issues, empowering you with greater control over your tax status.
Read more: Steps to take if your SARS tax compliance status shows as “non compliant”
How to get tax clearance: obtaining your Tax Compliance Status
The South African Revenue Service (SARS) offers two ways for taxpayers to request their Tax Compliance Status (TCS):
- SARS Online Query Service (SOQS): This platform allows you to submit your request.
- eFiling: This is SARS’ online tax filing portal.
Steps on eFiling – here’s how to request your TCS via eFiling
- Access your eFiling profile and view your “My Compliance Profile.”
- Under the “Tax Compliance Status” section, choose the type of TCS you need:
– Good Standing: This verifies your overall tax compliance.
– Approval International Transfer: This is for residents transferring funds abroad or non-residents who have ceased residency. - Complete the “Tax Compliance Status Request” form and submit it to SARS.
Read more: AIT – the ultimate guide to the new SARS Tax Compliance Status for South African expats.
SARS TCS PIN and verification
You’ll receive an overall tax compliance status and a unique TCS PIN upon approval. You can receive the PIN via SMS or view it on your eFiling profile’s “Tax Compliance Status Request” dashboard. The TCS result letter will also contain a printable copy of the PIN.
Sharing your TCS PIN: third party verification
The TCS PIN allows you to authorise third parties (organisations or government departments) to verify your tax compliance status online via eFiling. When you share the PIN, the authorised party can view your current tax compliance status at the time of verification, not the status when the PIN was issued. Sharing only reveals your overall compliance; no other information is accessible for confidentiality reasons. Remember: Each TCS request will generate a unique TCS PIN.
FinGlobal: tax compliance specialists for South Africans
Staying on the right side of South African tax regulations can be complex, especially for expats and individuals managing cross-border finances. FinGlobal can simplify your South African tax clearance experience! Our team of dedicated tax specialists offers comprehensive support for a wide range of tax needs, including:
- Expat tax compliance: Ensure you comply with South African tax regulations while living abroad.
- Tax refunds: Maximise your tax returns and claim any eligible refunds.
- Approved International Transfers: Streamline transferring funds abroad while adhering to tax requirements.
Don’t let tax issues cause you stress. Let FinGlobal handle the complexities. Ready to get started? Simply provide your contact details in the form below, and we’ll be happy to discuss your specific tax situation and tailor a solution to meet your needs.