GOODBYE TAX CLEARANCE CERTIFICATES, HELLO ELECTRONIC TAX COMPLIANCE STATUS

On the 2nd of November 2019, SARS stopped issuing what we have known for many years to be a Tax Clearance Certificate (TCC). Well, in 2015 when SARS introduced the Tax Compliance Status (TCS) system, they warned us that the use of printed TCC’s will be stopped at a future date. They have now reached a point where printing of TCC’s has terminated, and the TCS PIN will have to be used by all taxpayers to share their tax compliance status electronically with third parties. The reasons for this move are pretty obvious. Printed TCC were valid for 12 months provided you kept your tax affairs up to date. If you didn’t, then you would be sitting with a document that said you were tax compliant when in fact you were not. Also in this day of advantaged technology, printed TCC were easy prey for fraudsters

So how does the electronic Tax Compliance Status system work?

When a third party requires your tax compliance status, instead of requesting for a printed TCC, they now need to request for a Tax Compliance Status PIN. The TCS PIN enables you to authorise any third party (an organisation or government) to view your status online via eFiling. It will present your overall tax compliance status at the date and time of viewing it. To protect your confidentiality, no other SARS information will be accessible to a third party except your compliance information.

What does this mean for me as a taxpayer?

Since third parties that have been authorised to access your tax compliance status using the TCS PIN can do so anytime, you need to make sure that you are always tax compliant. This means that:

• You do not have any outstanding tax returns
• You do not owe any money to SARS unless a payment arrangement or suspension of debt has been agreed to
• You are registered for all the tax products that you are liable for
• Your registered particulars are updated, and
• You have either merged or declared all your registered tax reference numbers.

The new TCS system has at its heart the “My Compliance Profile (MCP)” functionality. The MCP affords taxpayers the opportunity to view their tax compliance status online as determined by SARS in order to remedy any non-compliance identified. The introduction of the MCP empowers taxpayers with more information about their tax compliance and forms the basis for the overall compliance status issued with regards to TCS applications (for example for Tender or Good standing and others). So before issuing a TCS PIN to any third party, it is advisable to view your MCP or to ask your accountant to check that your tax compliance is in order.
The Accounting Village has a team of expert accountant who are also registered tax practitioners that can assist you with all your tax needs. You can view our once off tax services by viewing the link below: