Here's how to get your tax clearance certificate easily
Doing business in South Africa means, at some stage, you'll need a tax clearance certificate from SARS. But do you know which type of tax clearance certificate you need and how to get it?
The Tax Administration Act has codified the requirements for issuing a tax clearance certificate and SARS has issued further guidelines. We've simplified these below to minimise the stress of getting your tax clearance certificate.
First decide the type of tax clearance certificate you'll need
This could be for a certificate of good standing required by a supplier, or for a tender you've applied for. SARS must issue or decline an application for a certificate within 21 business days from the date on which the application is made.
'It will therefore be difficult to fast-track a clearance certificate if 21 business days have not yet elapsed,' says Sharon MacHutchon, tax consultant at global audit, tax and accounting firm Mazars.
For a 'good standing' tax clearance certificate
, you'll need to furnish the reason for the tax clearance
whereas for a 'tender' certificate, you'll need to reflect the tender number, the estimated amount of the tender and duration of the tender on the application form.
For SARS to issue a tax clearance certificate
, it must be satisfied that certain requirements have been met.
2 Circumstances where SARS won't issue you with a tax clearance certificate
A tax clearance certificate will not be issued if you have any outstanding debt due to SARS. This includes any taxes relating to income tax, VAT, PAYE, UIF, SDL and other taxes administered by SARS, excluding Customs & Excise.
SARS will also not issue a clearance if you have any outstanding tax returns. This holds for tax returns relating to all forms of taxes administered by SARS, and includes annual and monthly returns.
'However, if you've entered into an arrangement with SARS for submitting the outstanding tax returns, the tax clearance can be issued,' Sharon says.
to find out the 5 most common reasons people battle to get hold of tax clearance certificates
For a detailed explanation on tax clearance certificates
, get your hands on our FSP Business Practical Vat Loose Leaf
In the Practical Vat Loose Leaf
we've got a dedicated chapter on tax clearance certificates ,
in this chapter you'll discover...
Why do I need a tax clearance certificate?
How do I get a tax clearance certificate?
How to apply
When will my application be denied?
What if my business isn't registered for Vat?
Get your copy of the Practical Vat Loose Leaf
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