SARS Tax Clearance Certificate
Template — South Africa

Since 2015, SARS replaced physical tax clearance certificates with the electronic Tax Compliance Status (TCS) system accessible through eFiling. When a taxpayer applies for a TCC and is found to be compliant, SARS issues a unique Tax Clearance PIN that third parties can verify online in real time through the SARS eFiling verification portal. This section covers how the TCS system works, the different types of TCCs available (Good Standing, Tender, Foreign Investment Allowance, Emigration), the PIN generation process, the validity period (typically 12 months from issue), and the real-time verification mechanism that allows third parties to check a PIN's current status at any time — meaning compliance changes after the PIN is issued are immediately reflected.

The TCC application is submitted through the SARS eFiling portal. This section provides a step-by-step guide to the application process: logging in to eFiling, navigating to the Tax Compliance Status section, selecting the appropriate TCC type, confirming the taxpayer details, and submitting the application. Processing typically takes one to twenty-one business days depending on the complexity of the taxpayer's affairs — a fully compliant taxpayer with no outstanding items may receive their PIN within one to three business days, while a taxpayer with compliance issues may wait significantly longer while SARS evaluates the application. The section also covers the eFiling registration process for taxpayers who do not yet have eFiling access, and the process for tax practitioners applying on behalf of clients.

SARS evaluates compliance across all registered tax types when determining whether to issue a TCC. This section covers each tax type that affects compliance status: Income Tax (IT14 company returns or ITR12 individual returns under the Income Tax Act 58 of 1962), Provisional Tax (IRP6 returns for provisional taxpayers), Value-Added Tax (VAT201 returns under the VAT Act 89 of 1991), Pay-As-You-Earn (PAYE — monthly EMP201 returns and annual EMP501 reconciliation), the Skills Development Levy (SDL — reported on the EMP201), and Unemployment Insurance Fund contributions (UIF — reported on the EMP201). Non-compliance with any single tax type — whether an unfiled return, an unpaid assessment, or a registration issue — will result in the TCC application being declined or an existing TCC being revoked.

Under Treasury Regulation 16A9.1(d) of the Public Finance Management Act 1 of 1999, all bidders for government contracts must provide a valid Tax Clearance Certificate. Bid submissions without a valid TCC are disqualified as non-responsive — there is no discretion available to the evaluation committee. This section covers the specific TCC requirements in government procurement, how to present the Tax Clearance PIN in bid documents, the CSD integration with SARS (which verifies tax compliance automatically), the requirements for joint venture tenders (where each JV member must independently hold a valid TCC), and the implications of TCC revocation during the tender evaluation period or during the performance of a government contract. State-owned entities apply equivalent requirements in their own procurement policies.

B-BBEE verification agencies assess tax compliance as part of the verification process under the B-BBEE Codes of Good Practice. A measured entity that is not tax compliant may receive a reduced B-BBEE score or may be unable to complete the verification process. This section covers the specific tax compliance requirements for B-BBEE verification, how the verification agency checks tax status (typically by verifying the Tax Clearance PIN), the impact of non-compliance on the B-BBEE scorecard, and the cascade effect — where a company's B-BBEE non-compliance (caused by tax issues) affects the B-BBEE scores of its customers who claim procurement points from it.

South African residents who wish to make foreign investments using their annual foreign investment allowance (currently R10 million per calendar year for individuals) or their single discretionary allowance (R1 million per calendar year) must obtain a specific type of TCC — the Foreign Investment Allowance TCC. Authorised Dealers (banks) are required to verify SARS tax compliance before processing foreign currency transfers above the single discretionary allowance threshold. This section covers the specific requirements for the Foreign Investment Allowance TCC, the application process through eFiling, the verification process at the Authorised Dealer level, and common issues that delay or prevent the issuance of this TCC type.

Individuals who are ceasing to be South African tax residents (whether through formal emigration or through establishing tax residency in another jurisdiction) must obtain an Emigration Tax Clearance Certificate from SARS. This TCC type confirms that the individual has settled all outstanding South African tax obligations, including exit charges on worldwide assets under the "deemed disposal" provisions of the Eighth Schedule to the Income Tax Act. This section covers the emigration tax clearance process, the deemed disposal provisions and their financial impact, the interaction between tax residency cessation and the new SARB emigration framework (which replaced the formal emigration process in 2021), and the documentation SARS requires for the emigration TCC application.

A taxpayer who owes assessed taxes but cannot pay the full amount immediately may enter into a formal payment arrangement with SARS under Section 167 of the Tax Administration Act. Critically, a taxpayer who has an approved payment arrangement with SARS and is meeting all the agreed instalments is treated as compliant for purposes of the TCC — meaning they can obtain and maintain a valid Tax Clearance Certificate despite having an outstanding tax debt. This section covers the process for applying for a payment arrangement through eFiling, the requirements SARS considers when evaluating the application (including the taxpayer's ability to pay, the amount outstanding, and the proposed instalment schedule), the consequences of defaulting on an approved arrangement, and the interaction between payment arrangements and the TCC system.

When a taxpayer disagrees with a SARS assessment, they have the right to object under Section 104 of the Tax Administration Act and, if the objection is disallowed, to appeal to the Tax Court under Section 107. This section covers how outstanding disputes and objections affect tax compliance status — in some circumstances, SARS may treat a disputed assessment as not affecting compliance status while the dispute is being resolved, while in others, the taxpayer may need to pay the assessed amount (or a portion of it) pending resolution to maintain their TCC. The section also covers the suspension of payment provisions under Section 164, which allows a taxpayer to apply for the postponement of payment of disputed tax pending the outcome of an objection or appeal.

TCC applications are commonly rejected for outstanding returns (the most frequent reason), unpaid assessed taxes without an approved payment arrangement, inactive or dormant tax registrations that should have been deactivated, discrepancies between the taxpayer's registered information on SARS systems and other databases, and unresolved SARS correspondence or requests for information. This section provides detailed remediation steps for each common rejection reason: how to file outstanding returns, how to arrange payment of assessed taxes, how to deactivate dormant tax registrations, how to update taxpayer information on the SARS system, and how to respond to outstanding SARS correspondence. The section also covers the "IT88" automatic debt collection process and its impact on TCC status.

A valid TCC can be revoked by SARS at any time if the taxpayer's compliance status changes. Common triggers for revocation include failure to file a return by its due date, failure to pay an assessment by its due date (without an approved payment arrangement), a new assessment that creates an outstanding tax debt, or a change in the taxpayer's registered information that creates a compliance issue. Because the TCS system operates in real time, revocation is immediate — third parties verifying the Tax Clearance PIN will instantly see a "non-compliant" status. This section covers the causes of revocation, the practical consequences (disqualification from pending tenders, CSD non-compliance, B-BBEE verification failures), the notification process (SARS typically sends an eFiling notification), and the steps to restore compliance and reapply for a TCC.

The National Treasury Central Supplier Database performs automated, real-time verification of SARS tax compliance for all registered suppliers. This integration means that a supplier's tax compliance status is continuously monitored — it is not a once-off check at the time of CSD registration. This section covers how the CSD-SARS integration works, how to ensure your SARS compliance status passes CSD verification, common discrepancies between SARS and CSD records that cause verification failures (such as mismatched company names, incorrect tax reference numbers, or outdated director information), and the process for resolving CSD tax compliance failures.