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Amendments regarding SARS' Tax Clearance Certificate: What you need to know

by , 19 May 2015
Recently, the Tax Administration Act brought in amendments to Tax Clearance Certificates. It did so to cater for the modernisation of the TCC procedure. This means that now both you and third parties can verify the tax compliance status of a taxpayer online.

Here's what you need to know about the process...

Here are the amendments to SARS TCC process:

According to the amendments, SARS can now:

• Extend the 21 business day period it has to either issue or decline your TCC. This is for SARS to make sure you're compliant. It will do this, for example, where it looks like you want to make offshore transfers of large amounts; and
• Invalidate a TCC from the date you become noncompliant. It can do so until you become compliant again.

The amendments to Section 257 of the Act also let the Minister of Finance request a TCC from you for governmental purposes.

This may happen:

• When yyou'r tendering for procurement contracts with an organ of state; and/or
• Where SARS lays down additional procedural requirements for the issue and withdrawal of TCCs.

Now that you know what's changed, let's look at the new rules for TCCs.

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Here are the rules about Tax Clearance Certificates:

SARS introduced an improved TCC application process on eFiling and in its branches. It did this as the first step to implement a modernised tax compliance process.  SARS has further enhanced the process to guard you against fraud and the misuse of TCCs.

Here's how this change affects the TCC application process

1. Submission of applications

SARS no longer accepts posted, faxed or emailed TCC applications. You must now apply for a TCC either via eFiling or at a SARS branch.

2. Applications for FIA and emigration

If you need a TCC for Foreign Investment Allowance (FIA) or emigration, you can now only apply for it at a SARS branch.

3. TCCs that can't be finalised

If SARS gets a TCC it can't immediately approve and finalise, it will send it away for review.

SARS will give you a response of the outcome within five business days. It will send you an email notification. If it declines your TCC, the email will include the reason for this decision.

Make sure you provide all your supporting documents to speed up the application process.

4. Consolidating compliance records

SARS will add all branches belonging to the holding company, to its system and provide a consolidated compliance view. This means SARS can check the compliance of the holding company and all its branches at a glance.

5. Consequences of non-compliance of branches

The tax compliance of the branches of a holding company will have an impact on the holding company's tax compliance status. So if any one of the branches is non-compliant, SARS will also see the holding company as non-compliant and will not issue the TCC.

Note: The Vat registration number that appears on the TCC will be the number of the requesting branch. But the trading name that appears on the TCC is the holding company's trading name.

6. Pre-population of company details

The name that will appear on the TCC will be the name SARS has on its records per tax reference number (income tax, Vat and/or PAYE) and trading name if applicable. This will be pre-populated next to each reference number reflected on the TCC.

If you don't agree with the names pre-populated, you'll have to update your registered particulars at a SARS branch. To do this, take your relevant supporting documents, such as your company registration documents from the Companies and Intellectual Property Commission (CIPC).

Your organisation's registered representative or TaxPractitioner can also update these details on eFiling.

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