A tax clearance certificate is a three-letter word that plays on many people’s lips, especially if you are a South African ex-pat dealing with SARS from abroad. In short, a tax clearance certificate is an official document that shows that you are in good standing with SARS and do not owe them any outstanding taxes, and it is necessary to have one if you emigrate.
Herewith are a few questions and answers to bring clarity to the matters of tax clearance certificates:
Why do I need a tax clearance certificate?
Anyone wanting to transfer funds abroad using foreign investments, wanting to emigrate or financially emigrating requires a tax clearance certificate. If you’re going to emigrate financially, the Reserve Bank must change your status from resident to non-resident.
How do I get a tax clearance certificate?
You must apply for any one of the three tax clearances:
- To verify tax compliance for business dealings.
- For foreign investment allowances without financial emigration.
- For emigration and to show proof of tax compliance.
What must I know when applying for tax clearance?
Note that you must state the reason for wanting tax clearance on your application CLEARLY and that once the certificate is issued, it is only valid for a year. Also, you must remain tax compliant during the year of the certificate being issued, and you can withdraw the certificate at any time if SARS wrongly issued it.
Are there any requirements from my side?
The short answer is yes.
- Before applying for tax clearance, you must register for income tax.
- Settle all owing taxes before you apply for tax clearance.
- Ensure that all your tax matters, such as tax declarations, are up to date.
- Your tax reference numbers must be active and correct.
- Details on your application must correspond with the information that SARS has on their system.
PRN Advisory and Tax Services have the in-depth industry knowledge to advise you and help with tax-related services to ensure that you avoid penalties associated with errors and non-compliance. Our tax experts will also advise you on your specific needs and assist in obtaining your tax clearance certificate hassle-free. Contact us today.