Keeping tax records electronically: what SARS requires
When a South African business may keep its tax records only in electronic form, what SARS expects of them, and when it needs SARS's permission first.
By Achekam · · 5 min read · For Running a business businesses in South Africa
Most small businesses in South Africa already run largely on screens. Invoices go out as PDFs, supplier bills arrive by e-mail, bank statements are downloaded rather than posted. The filing cabinet is shrinking, and the question naturally follows: can it go altogether?
SARS's answer is a qualified yes. Records may be kept electronically, but on SARS's terms, and in two situations a business needs SARS's authorisation before it relies on them. This article sets out what SARS expects of any record, what changes when the record is electronic, when to apply on form EFR001, and how to keep files in a way that would stand up if SARS asked to see them.
What SARS expects of every record
SARS says records must be kept in their original form, in an orderly fashion, in a safe place and open for inspection. It adds that they may be kept electronically as prescribed by the Commissioner.
Each of those words describes something a SARS official would test in practice:
- Original form. The record as it was created or received, not a retyped summary of it.
- Orderly. Someone other than you should be able to find a given month's records without a search party.
- Safe. Protected from loss, accidental deletion and unauthorised changes.
- Open for inspection. When SARS asks, you can produce the records, in a usable form, within a reasonable time.
For a VAT vendor, SARS says tax invoices, bills of entry and accounting records must be kept for a period of 5 years. More generally, SARS says a person who has submitted a return must keep records for five years from the date the return was submitted. When that period runs longer, and how it interacts with the Companies Act, is covered in how long to keep tax and company records.
Electronic records in the prescribed form
The permission to keep records electronically is not open-ended. It is permission to keep them as the Commissioner prescribes. SARS's record-keeping page sets out the general requirements, the retention periods and the EFR001 authorisation route, and it is the place to start before you change how your business keeps its records.
For a business whose records are born digital, such as invoices generated by its accounting system, supplier invoices received by e-mail and bank statements downloaded from online banking, keeping them electronically is the natural way to keep them as they arrived, provided the Commissioner's requirements are met. The care needed is in keeping them orderly, safe and retrievable for the full period.
When you need SARS's authorisation: form EFR001
SARS says a person needs SARS authorisation in two situations, and applies on form EFR001:
- To keep records in a different form from the one SARS's rules otherwise require.
- To keep electronic records outside South Africa.
The first raises a common question: paper originals that a business would like to scan and destroy. Whether scanning and discarding a paper original counts as keeping the record "in a different form" is the kind of question to settle with your adviser, against SARS's rules, before any paper goes in the shredder. Until it is settled, keep the paper.
The second depends on where your electronic records are actually held. That is a question about your own arrangements: your computers, your backups and any service you use to hold files. If you are not certain where your electronic records are kept, find out, because the answer decides whether you need to apply. This article does not state where any provider holds data.
Building a record SARS can inspect
Whatever system you use, the same habits make electronic records defensible:
- Keep one folder structure per tax year and per tax type, and use it consistently.
- Name files so a stranger could understand them: supplier, document number, date.
- Never overwrite a record. If a corrected version arrives, keep both.
- Make sure more than one person can retrieve records, so an inspection does not depend on one staff member.
- Test retrieval now and then: pick a transaction and see how quickly you can produce its supporting documents.
Versions and fingerprints in Document Centre
Achekam's Document Centre is a folder-based store where a business uploads files or whole folders, previews, downloads, renames, moves, tags, archives and searches them. When a new version of a file is uploaded, the earlier versions are kept, which supports the "never overwrite" habit: a corrected invoice from a supplier sits beside the original, not in place of it. Uploads go in batches of up to 25 files, with a default limit of 100 MB per file.
Every stored file gets a SHA-256 fingerprint, executable files are refused by default, and every upload passes a malware check. That check uses ClamAV when the server is configured for it; otherwise a built-in heuristic check runs. A fingerprint of this kind is a standard way of showing that a file has not changed, because the same file always produces the same fingerprint.
None of this decides the EFR001 questions above. Those remain yours to answer for your business.
Invoice PDFs as the record you issued
For your own sales, the record is the invoice you issued. In Achekam an issued invoice can be downloaded as a PDF on the business's letterhead and e-mailed from the invoice, with or without a pay link. A failed send is reported as not sent, so you know which customers did not receive their copy.
Keeping that PDF, rather than a later re-print, means you hold the document in the form your customer received it. File it in the same folder structure as everything else, or keep it in Document Centre with the month's other records. Company records under the Companies Act have their own list and rules; see company records you must keep.
Decide, then write it down
Agree with your accountant which records the business will keep only electronically, where they will be held, and whether EFR001 applies. Put that decision in a one-page note with the date and who approved it. If SARS ever asks how you keep your records, that note, and a folder you can open on the spot, will answer the question.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
