Global Courant 2023-05-04 14:33:34
The South African Revenue Service (SARS) has updated its method of obtaining Tax Compliance Status (TCS).
According to the tax authorities, it improved its TCS system on April 24 after consultations with stakeholders and the South African Reserve Bank (SARB).
TCS allows taxpayers to authorize a third party to verify their compliance status through electronic access.
SARS’ previous TCS solution was operational since April 2016 and needed to be rationalized and accelerated in line with international standards.
In addition, after announcing the abolition of emigration as a foreign exchange control concept in 2020, the SARB removed the requirement to apply to emigrate financially.
SARS said this necessitated changes to the process and forms. The development is part of the strategic intent of the Authority of Voluntary Compliance and Modernization.
The enhanced TCS system supports SARS’ strategic goals of making it easier for taxpayers to comply, SARS said.
“It also embeds TCS verifications in the government, private sector and individual taxpayer space, either voluntarily or through legislation. While this makes it easy for taxpayers, it will be harder for taxpayers who don’t want to comply.”
“The enhanced TCS system also aims to dramatically improve turnaround times for compliant taxpayers and merchants,” said SARS.
There are also now updated steps to apply for TCS with respect to foreign allowances applied for through the Approval for International Transfer (AIT) Applications, including the submission of the following documents:
Relevant material showing the source of the capital to be invested. A statement of assets and liabilities for the previous three tax years, including the disclosure of all investments, loan accounts and distributions from local and foreign companies, trusts, etc. If the TCS application is filed by someone other than the taxpayer, the relevant power of attorney must be be submitted.
The full guide can be found here:
SARS said the additional information requested on the AIT application ensures that all required taxes owed have been accounted for and, if necessary, addresses any non-compliance discovered through verification and/or an audit.
According to the tax authorities, no TCS status is required for annual transfers of up to R1 million.
“SARS believes that taxpayers claiming more than the R1 million annual one-off discretionary allowance are sophisticated taxpayers who should reasonably be able to dispose of the cost of the key assets they own.”
“This includes their local and foreign fixed properties, listed/unlisted investments, crypto assets and cash in bank to name a few. If the taxpayer does not own a certain type of asset, that must be recorded as zero on the assets and liabilities section of the application form.
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