Tax clearance at your leisure

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08 Sep 2016

SARS has recently gone live with a new Tax Clearance System (TCS) which stands to replace the traditional Tax Clearance Certificate (TCC) procedures. This TCS system offers taxpayers the flexibility of viewing their own tax compliance status through their e-filing profile whilst also allowing other authorised users to view the taxpayer’s tax clearance for verification purposes.

Personal Tax Compliance

This TCS function sheds more light on the taxpayer’s personal affairs by segmenting compliance into various categories, namely registration, submission of returns, debt and relevant supporting documents. Each category is marked either green or red with a brief description as to compliance or non-compliance. It goes without saying that the taxpayer must be registered for e-filing and have an income tax reference number in order to make use of this function.

The system has gone further in allowing the taxpayer to receive a detailed indication of which period their non-compliance arises and allows the taxpayer to rectify any shortcomings efficiently before making their status available to others. This function proves to assist taxpayers who are unaware of outstanding returns or penalties which have become difficult to monitor of late.

South African taxpayers abroad will also enjoy the functionality of the system and will no longer need to complete power of attorneys to have their tax clearance certificates collected from a SARS branch.

Third Party Verification

The TCS system will in due course replace clearance certificates as a whole by allowing third parties to view the taxpayer’s compliance status when the authorisation pin and tax reference number are made available. The pin is entered on the third parties e-filing profile, which in turn confirms or denies compliance within the various SARS categories. This ensures the taxpayers compliance can be monitored by the authorised third party on a real time basis whilst ensuring that the taxpayer’s security is maintained.

Additional security functions have been added to ensure the taxpayer is able to monitor which third parties have viewed their profile. Any suspicious third party viewings can be avoided by the taxpayer simply changing its pin and redistributing the updated pin to trusted third parties.

The TCS is a welcome fixture to third parties who no longer need to concern themselves with the clearance certificates expiring, and will be enjoyed by taxpayers who will avoid frequent visits to their nearest SARS branch to collect documents which will inevitably expire. The new and improved system is also guaranteed to streamline commercial transactions and credit applications by eliminating the notorious delays in obtaining tax clearance certificates.

(This article is provided for informational purposes only and not for the purpose of providing legal advice. For more information on the topic, please contact the author/s or the relevant provider.)

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