Johannesburg – The South African Revenue Service (SARS) has published changes to the reporting of tax compliance status for outbound transfers of funds to improve processing times for taxpayers and compliant entrepreneurs.
In a statement Wednesday, SARS said the previous Tax Clearance Status (TCS) solution has been in operation since April 2016 and has processed a significant and growing volume of taxpayers submitting requests for third-party verification, including Foreign Investment Allowance and Emigration. The SARS stated that it has seen the need to improve the system to streamline and expedite it.
In addition, following the announcement of the abolition of emigration as a foreign exchange control concept in 2020, the South African Reserve Bank (SARB) announced that it had abolished the requirement to apply for financial emigration (the MP336 application). This has required changes to SARS processes and forms.
According to SARS, the improved TCS system was implemented on April 24, 2023, after consultations with authorized dealers and the SARB.
“The TCS system supports SARS’ strategic goals of making it easier for taxpayers to fulfill their obligations. It also embeds TCS auditing in the government, private sector, and individual taxpayers, either voluntarily or through legislation.”
While the changes make it easy for law-abiding taxpayers, SARS warns that it’ll be more difficult for taxpayers who are unwilling to comply.
“The additional information requested on the Approval for International Transfer (AIT) Application will allow SARS to ensure that all required tax payments have been accounted for, and, if necessary, to address any violations identified during an audit and/or review.
“This is part of SARS’ modernization efforts that align with our strategic intent of voluntary compliance,” SARS said.
SARS added that tax clearance status isn’t required for annual remittances of up to R1 million.
“SARS believes that taxpayers claiming more than the R1 million annual discretionary allowance are experienced taxpayers who should reasonably have records of the acquisition price of the major assets they own.
“This includes their local and foreign fixed properties, listed/unlisted investments, crypto assets and cash in the bank, to name a few. If the taxpayer does not own a particular type of asset, that should be captured as zero on the asset and liability part of the application form,” SARS explained.
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