Tax compliance makes its way into many aspects of life and business. Perhaps you’re considering applying for a tender, or for a foreign investment allowance to move funds offshore, or even looking to emigrate and leave our shores. These are just a few examples of instances where you may be asked by a third party to provide a Tax Clearance Certificate.
And until now, the course of action to obtain your certificate has been a tedious one.
Upon request, SARS would check its records and verify that the taxpayer had filed all required tax returns, paid all taxes, penalties and interest due, before releasing a Tax Clearance Certificate confirming a good standing. This was a mostly manual and, therefore, time-consuming exercise. Not to mention that in order to collect your certificate, you had to endure the inevitably long queue at your local SARS branch.
But that’s all about to change!
SARS has recently announced a progressive change to their system, which will come into play mid-April 2016 and ease many administrative and logistical headaches around tax clearance.
Firstly, the naming convention has changed from Tax Clearance Certificate (TCC) to Tax Compliance Status (TCS). This more accurately reflects the enhancement of moving the system from a ‘point in time’ check to a real-time verification of current compliance.
|
Old Tax Clearance Certificate (TCC) |
New Tax Compliance Status (TCS) |
|
|
Application |
Apply online via SARS eFiling or manually in person at branch |
Apply online via SARS eFiling |
|
Period of Validity |
12 months |
Real-time, current status |
|
Waiting Period |
48 hours (eFiling) to 21 days (manually) |
Instant access |
|
Proof |
Hardcopy certificate, collected from SARS branch |
Compliance Clearance Pin (CCP) generated for online check by third parties Printable certificate - TCC - available (with electronic verification) |
The fact that manual human intervention has been phased out with this approach helps to drastically reduce the turnaround time and minimise risk of potential fraud. The added bonus, of course, is that the introduction of the online compliance clearance pin means that in-person visits to SARS to collect paper certificates are no longer necessary.
As a taxpayer, it’s important to understand what SARS considers when evaluating tax compliance. Here are a few common situations to avoid if you’re looking for a clear TCS.
