Authors: Joon Chong, Nina Keyser, Nirvasha Singh and Carryn Alexander (Webber Wentzel)
SARS replaced the Tax Clearance Certificate (TCC) system with the enhanced Tax Compliance Status (TCS) system on eFiling in April 2016. The new TCS system is aimed at improving tax compliance as taxpayers can better manage their TCS and remedy any non-compliance through the “My Compliance Profile” (MCP) function on eFiling.
For some taxpayers, their tax compliance status is of utmost importance in ensuring that they are able to tender for new or continue with existing business with government institutions. National Treasury requires accounting officers and accounting authorities of certain government institutions to reject bids from a supplier without written proof from SARS that the supplier either has no tax obligations or has made arrangements to meet their outstanding tax obligations.
MCP now forms the basis for the overall compliance status issued by SARS with regards to TCS applications. The taxpayer’s compliance status on MCP depends on requirements such as their registration status; outstanding returns; outstanding tax debts with SARS for which payment arrangements have not been made; and whether there is a failure to submit information requested by SARS. Taxpayers are able to remedy a specific area of non-compliant status or they can log a request with SARS to rectify the non-compliant status on the MCP.
Taxpayers can request their TCS for a specific purpose (eg tender or bid) using the “Tax Compliance Status Request” functionality. When SARS approves the request, the taxpayer is issued with an overall TCS and PIN, which allows the taxpayer to authorise third parties to verify the taxpayer’s TCS online via eFiling. The PIN enables third parties to view the taxpayer’s overall TCS as at the date and time they check it. In addition to the PIN, the taxpayer is able to print a copy of their TCC from the MCP profile. This is a significant improvement from having to obtain original printed TCCs in person from SARS branch offices.