By: Christelle Venter

SARS has dropped a bomb on all South African Taxpayers. 

The issuing of the printed Tax Clearance Certificates (TCC) will be terminated effectively from 25 October 2019. They are implementing a more secure and fully electronic Tax Compliance Status (TCS) system. 

The goal of the TCS system that was implemented in 2015 was to end the use of printed TCCs, and to stop issuing TCCs at a future date. 

What does this mean for businesses & individuals?

SARS has now reached a point where the ability to print a TCC will be terminated completely, and the TCS PIN will have to be used by taxpayers to share their tax compliance status electronically with any third parties. In addition, the ability to obtain or print a TCC and all active Tax Clearance Certificates will end and all TCCs that are currently in circulation will cease to be valid. 

As from 25th of October 2019 the tax clearance certificates that businesses and individuals currently have will automatically expire and that means they will have to request a new certificate due to this new system being implemented. This PINS will be valid for 12 months. 

Each time a third party is viewing the tax clearance the taxpayer will receive a notification. 

Businesses and individuals will therefore no longer be able to verify or print the TCC. 

Is there a solution and will it be safe?

Yes, there is always a solution, and SARS are encouraging all taxpayers to familiarize themselves with the electronic TCS system and the use of the PIN, in order to be prepared for when the current system is terminated. 

This is a secure and convenient electronic way to authorize any third party (an organization or government department) to view your tax compliance status online via the eFiling platform by providing them with just a PIN.

This will enable the third party to access your overall tax compliance status as at the date and time they view it, instead of your tax compliance status as it was at the date when it was issued to you, this will allow for a more accurate tax compliance status at all times to third parties. 

It is important to remember that the tax compliance status of any business or individual is not static but changes according to your continued compliance with the tax obligations. 

SARS ensured that no other information will be accessible to any third party through this process.

How will this system work?

Whether you handle your own eFiling profile or it is with your tax practitioner, the process will be the same. As and when you require a tax compliance status pin, this will be generated from the eFiling system and a document generated by SARS will be issued with the specific PIN that must be used to open the tax compliance status. 

This document with PIN can then be sent to the third party requesting the TCS and on their side they will have to access it on eFiling by using the taxpayers reference number and PIN. 

The following steps can be followed: 

  • Step 1: Activate the verification service
    You need to activate the “TCS Verification” service. Activation is a once-off process.

  • Step 2: Capture the verification details
    To verify the TCS, capture the PIN and the tax reference number of the taxpayer.
    To verify the TCC, capture the TCC number and the tax reference number of the taxpayer.

  • Step 3: View the verification result
    Submit the captured details. Confirm that the taxpayer information displayed is the taxpayer whose tax status you want to verify.

For TCS verification, the taxpayer’s tax compliance status will be displayed and will be colour coded with a detailed description of what the status means.

What do the colour codes mean?

  • Red – Tax affairs are not in order and the taxpayer is not tax compliant

  • Green – Tax affairs are in order and the taxpayer is tax compliant

  • Green and blue – Tax affairs are in order. The taxpayer has recently registered for tax and has not yet reached a filing or payment due date.

How do I save the verification result?
The details of each verification performed will be saved on your eFiling profile under “Verification History”. You may also print the verification result.

This may sound complicated and a lot to take in, but we as tax practitioners are here to assist in all your needs in this regard. We will ensure that the process is stress and pain free in all ways possible. 

Please remember that effectively from 25 October 2019 this will be fully implemented and all previous TCC in circulation will be no longer valid. 

Please contact us if you have any more questions or concerns regarding this new TCS system change.

Annja LoucaSARS