Documents Required
Company Income Tax Number
Company Registration Documents
Signed SARS power of attorney
Business Bank confirmation letter
NB : You must have registered a public officer with SARS. Public Officer Registration
On Completion you will have...
A Tax Clearance Certificate from SARS.
Possible Difficulties
As Mentioned Above : If there are outstanding company (ITR14) or Director (ITR12) tax returns SARS will reject the application. These will need to be settled before we can proceed with drawing your final tax clearance certificate.
What is a Tax Clearance?
A Tax Clearance certificate is a document which the South African Revenue Services (SARS) issues with regards to the person's tax affairs. This can also be used and is required for tender applications and "good standing" in terms of foreign investment and for emigration purposes. A Tax Clearance is usually required by businesses for a tender or to render a particular service. The Tax Clearance certificate is only valid for one year from the date of issue. Being tax compliant is not just good for you but will also benefit your company's tax status.
What are the requirements to apply for a Tax Clearance Certificate?
The following documents is required when applying for a Tax Clearance Certificate for your company an income tax reference number for the company, the director or also known as the public officer of the company must have a certified copy of his/her ID or a valid passport if the applicant is a foreign, a signed SARS power of attorney and a business bank confirmation letter confirming the business bank account. Please keep in mind in order to be tax compliant you should make sure that your company does not have any outstanding tax returns and that all your returns are filed up to date.
How do I obtain a Tax Clearance Certificate?
Your easiest method is to make use of our comprehensive service. We know what SARS needs, and can help you compile all the documents that are needed for Tax Clearance, and its quick and easy for you, without leaving your home.
If you would prefer the longer way, (with many queues) you can also request your Tax Clearance Certificate at a SARS branch by completing a Tax Compliance status request to specify the type of TCC you require, for example, Tender, Good Standing, Foreign investment or Emigration. You can also request a Tax Clearance Certificate online on the SARS E-Filing website. There is a procedure which needs to be followed when doing the application online; Firstly you need to register your organisation/company on e-filing then select the Tax compliance status request option and the type of tax clearance status for which you would like to apply for.
You will have these options to choose from, Good standing, tender, foreign investment and emigration. You will then complete the Tax compliance status request form on e-filing and submit to SARS. Once your request is approved by SARS you will be issued with overall tax compliance status and a PIN to print the Tax Clearance Certificate (TCC). The purpose for the Tax Clearance Compliance status PIN is to provide you with a way to authorize any third party to view your tax compliance status online via E filing.
What is a company Tax number?
When a company is registered with the Company Intellectual Property Commission (CIPC) the company will then be automatically registered as a tax payer and the company gets issued with a company income tax number. If you have however not received any notification from SARS after registering your company with CIPC you can contact the SARS call centre or visit your nearest SARS branch. If your company has not yet been registered with SARS you will need to do the tax registration at the SARS branch and complete a IT77C form which you will obtain at SARS, you will not be able to register for the first time on e-filing.
What are Company Tax Returns?
The company tax return is to declare all income received and all income taxable for the company. Companies are liable under the Income Tax Act for payment of tax on all income received by or within a financial year. In South African the current company income tax rate for companies is 28%. Companies only gets taxed on the NET PROFIT and not turnover.
What is Provisional tax IRP6?
It is a method of paying tax which is due and to avoid tax payers from paying big amounts. The IRP6 is also a tax return that is completed by provisional tax payers, usually twice during the tax year period to declare their income.
What is a ITR14?
The ITR 14 form or Income tax return is a SARS document required for all registered companies done with CIPC to complete the ITR14 and submit to SARS once every year. It is basically a summary of the entire year's income and expenses which will be calculated for tax.
How to submit a tax return?
A return can be submitted or filed either on e filing or you can visit your nearest SARS branch. When using e filing to submit your company tax return you can log onto www.sarsefiling.co.za then generate your ITR 14 tax return complete the return and submit.
What is SARS e filing?
SARS e filing is a free, online service which tax payers can use anytime to do submissions of returns and declarations. This service also allows tax practitioners and businesses to register for free and submit returns and make payments also to do other related services with SARS. E filing allows you to electronically file your returns and avoid the long queues at the SARS branches.
When must you register for VAT?
Value Added Tax (VAT) currently as per this article is at 15% and was implemented as of 1 April 2018. This has been added to all goods and services but only if your company is registered for VAT which also means if your company is not VAT registered you are not allowed to charge VAT. It is only mandatory to register with SARS for VAT if your company's turnover is more than R1 million p.a.
However, companies can voluntary register for VAT if their turnover is less than R1 million but exceed R50, 000 per year. Once your company is registered for VAT you become liable to submit the return of VAT. When a company is registered for VAT you can claim back the Vat which you have paid on purchases.
What does it mean to be VAT registered?
The advantage of being VAT registered is that you can claim back the VAT which you pay also most companies want to do business with a company which is VAT registered so that they can also reclaim VAT back which you have charged. If you are not VAT registered then you cannot claim any of the VAT back you also then don't need to charge your clients VAT.
How long does it take to be VAT registered?
Before applying to be VAT registered you must ensure that all company income tax returns must be up to date and filed with SARS. All PAYE for the company must be up to date if the company is registered for PAYE, all the director's personal income taxes must also be up to date. VAT registrations can either be done online or going into your nearest SARS branch and apply using the VAT 101 from. The VAT registration certificate will only be issued if all documents are correct and you have met the requirements.
What are the requirements to register for VAT?
The company has to have a company income tax number copy of invoices that correspond to payments received in your business account which MUST exceed R50 000 or contracts (no quotes or cash flow projections), copy of company registration certificate, proof of address of the company (e.g. Rate and taxes account not older than 3 months or a valid lease agreement, certified copy of the director, 3 months originally stamped bank statements, certified copy of directors id and the SARS power of attorney.
What types of Vat registrations are there?
You get two types of registrations, namely a Mandatory registration with this registration if a company's total value of supplies exceed R1 million at the end of any twelve-month period must register as Vat vendor. Then you also get the Voluntary registration with this registration a person may voluntarily register for VAT where the person had already made a turnover exceeding R50 000 in a 12 month period.
A person may also register voluntary if the business has not yet exceeded within 12 months from the date of registration however a written contract stating clearly the company will make taxable supplies in excess of R50 00 in the following 12 months.
How do I apply for a VAT registration?
If you want to register for VAT you can do this online on the e filing website or you can visit your nearest SARS branch where you will complete a VAT 101 application for the registration with your supporting documents. This can also be done by a third party such as SWIFTREG which will then do the application and act on your behalf with power of attorney given by you.
What is a Public Officer?
A public officer is the person who represents the company and is usually one of the directors. The public officer should also be a registered tax payer with SARS. All companies must appoint a Public Officer within one month of the company registration by notifying SARS directly. Appointing the public officer can only be done by the client itself and this is to inform SARS. The responsibility of a Public officer is to handle the tax affairs of the company which includes submitting of annual tax returns and provisional tax returns.
Why are Tax Clearance Certificates declined by SARS.
If companies has been trading for a few years SARS will automatically check all previous years for outstanding tax returns. If there are any outstanding returns for the previous years SARS will not issue the Tax Clearance however even if your company has not traded or not made any money you still need to file the outstanding returns as a NIL return.
Once the client has filed all the companies outstanding returns and is up to date then you can proceed as SARS will grant you the Tax Clearance Certificate. You can file your returns by completing the IT14 and a IRP6 for each outstanding year. This can either be done on the e- filing website or going into your nearest SARS branch. We also suggest that you ask an accountant for assistance in this regard.
Can the Tax Clearance Certificate be emailed to the client?
No, when applying for a Tax Clearance Certificate online through SARS e filing website you can print the certificate from the online system. If you doing it at the SARS branch the Tax Clearance certificate will be issued to you. Should you require more original copies, you can obtain this at the SARS branch.
What is PAYE registration?
Pay As You Earn (PAYE) is when your employer deducts a portion of the income from the employee's monthly salary. This must be paid to SARS on a monthly basis. Each employee is required to be registered for PAYE. So basically, if you have a company or employer who employs people and you pay them a salary every month you must register for PAYE with SARS. Only if your company or business is registered for PAYE you must submit a monthly PAYE (EMP201) form which must be filed and submitted to SARS before the 7th of each month. If you do not submit the PAYE on the date its due SARS will add penalties.
How do I register for PAYE?
You can register for PAYE by completing the EMP 101e application for registration. The company needs to have an company income tax number, the company registration documents, an estimate of the total amount of your payroll for the next 12 months, the number of employees the payroll is based on, certified copy of director's id, bank confirmation letter confirming the business banking details, a certified copy of the public officer's id, proof of address for the public officer, as well as for the business address.
You can also process to register online on the e filing website by registering for additional taxes such as PAYE. If the company is already registered for at least one tax product on e- filing. This means the PAYE registration will be added onto your tax products status on e- filing and all details will be recorded directly on e-filing. Once all details are captured the PAYE number will immediately get issued to the client.
When do i have to register for PAYE?
It's a monthly deduction that gets done by the employer from the employees monthly salary, wages and bonuses and this deduction gets paid to SARS monthly. Pay As You Earn (PAYE) is required by law to deduct the correct amount which the employer's are required to contribute.
What is UIF?
Unemployment Insurance Fund (UIF) is when you become unemployed or unable to work for specific reasons namely maternity or illness. When you are relieved from duty by your employer you can apply for Unemployment benefits. This is only available to you if you have been contributing to the UIF while you were working. You cannot claim if you have resigned, or have been suspended from work
When can I claim UIF?
You can only claim unemployment benefits if you have been retrenched or dismissed or if your contract has been expired. You can also claim only if you unable to work because of illness. The amount which the employee must contribute is 1% of your salary paid by your employer, the total amount which the employer must contribute is 2% (1% contributed by the employee and 1% contributed by the employer).
What is a Tax Return?
Every month you must pay tax on the amount of money that you earn a month. A Tax Return is when you as a tax payer pays a contribution of your income and expenses for the year to SARS. You need submit an ITR12 form to SARS, this form is used to declare your income and expenses.