A Tax Clearance Certificate is a document issued by the South African Revenue Service (SARS) which validates your status as taxpayer and confirms that your tax affairs are in order at the date of issue.
The TCC is required for:
- applying for government tenders or advertised bids
- listing as a supplier or service provider for large corporations / government institutions
- verifying that someone is tax compliant (good standing)
- transferring funds out of South Africa using the Foreign Investment Allowance (FIA)
- emigration purposes
SARS will only issue a TCC if the following requirements are met:
- taxpayer has registered for an Income Tax reference number and this number must be active and correct (all registered particulars must be up to date)
- taxpayer has no outstanding tax returns
- taxpayer has no outstanding tax debt (unless a payment arrangement or suspension of debt has been agreed) – this includes Secondary Tax on Companies (STC), Administrative Penalties and Employee Tax
- taxpayer complies with all deferred tax arrangements
- tax returns and/or declarations are to date or in the process of being assessed by SARS
- the registration details on the TCC01 correspond with the information in the SARS system (if applicable)
The TCC has become very important for businesses and is generally required by suppliers when opening a new account. For a company to receive a TCC, the tax affairs of all the directors must also be up to date.
In the case of a group of companies, all companies within the group are required to be tax compliant. If any one of the sub-entities is non-complaint, the holding company will also be regarded as non-compliant and a TCC will not be issued.
Should you have any concerns about tax compliance certification, or need any further information, please contact our offices.
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