Paying SARS from a foreign bank account
How a taxpayer with no South African bank account pays SARS from abroad by SWIFT, in rand, early enough, and without bank charges reducing the amount.
By Achekam · · 5 min read · For Running a business businesses in South Africa
A Kenyan software company has a South African tax obligation but no South African bank account yet. A Nigerian director of a Johannesburg company settles an assessment from Lagos. A business winding up its local operations has closed its rand account but still owes a final amount. In each case the usual advice, "pay on eFiling or by EFT to the SARS beneficiary", does not help.
SARS has a separate route for payments from outside the country, with rules of its own. Following them carefully matters, because the costs of getting it wrong fall on the payer: a payment that arrives short, late or unidentified is treated as exactly that. This article explains who may use the foreign route, how the payment must be made, how much time to allow, and how to record it in the books.
Who may use the foreign payment route
SARS's payment rules say foreign payments are only for taxpayers without access to eFiling, EFT or a South African bank account. The route is not an alternative for businesses that happen to prefer paying from an offshore account; it exists for those who cannot pay the usual way.
If your business has a South African bank account, or is about to open one, the ordinary EFT route with its public beneficiaries and payment reference numbers is the one to use; see paying SARS by EFT with the right reference.
A foreign company that is opening a South African bank account should also check its company-law position. CIPC says a foreign company that conducts business in South Africa, for example by opening a bank account, holding meetings or entering into employment contracts, must register as an external company within 20 business days of starting those activities. How that works is explained in when a foreign company must register in South Africa.
Paying in rand to the SWIFT beneficiary
SARS's payment rules say foreign SWIFT payments must be made in rand to the beneficiary account SARS-FOR-999 at First National Bank. Three requirements are packed into that sentence:
- SWIFT. The payment is an international transfer through the SWIFT network, arranged with your own bank abroad.
- In rand. The instruction should be for the rand amount you owe, so that what SARS receives is the rand figure on your return or statement.
- SARS-FOR-999 at First National Bank. This is the beneficiary for foreign payments, separate from the beneficiaries used for local EFTs.
Identification matters as much as on a local payment. For local EFTs, SARS's payment rules say a payment is only accepted if the correct 19-digit payment reference number is used, and the same rules say unreferenced or partial payments may be allocated to the oldest debt first, on a first-in-first-out basis. Quote the reference for the return or debt you are paying on the foreign transfer too, so the money can be matched to it.
The details are set out in SARS's guide to its payment rules, which covers the foreign payment route alongside the local beneficiaries and how payments are allocated. Share it with the person at your bank who will capture the instruction.
Allow at least three days
Foreign transfers are not quick, and SARS's rules reflect that. Its payment rules say foreign SWIFT payments must be made at least three days before the due date.
That sits alongside a more general rule. SARS says it only recognises a payment once it is received into the SARS bank account, and a payment received after the due date is a late payment. For a foreign payment, the time between your instruction and SARS's receipt includes your bank's processing, any intermediary banks and the conversion to rand. Three days is SARS's minimum; if your bank tells you its international payments take longer, plan around your bank's timing, not SARS's floor.
Bank charges may not reduce what SARS receives
SARS's payment rules say bank charges may not be deducted from the amount owed. In practice, international transfers can attract charges from your bank, from intermediary banks and on arrival. If those charges come out of the amount sent, SARS receives less than you owe, and the shortfall remains outstanding.
So instruct your bank that charges are for your account, and check with them that intermediary charges will not be taken from the amount in transit. Where your bank cannot confirm that, discuss with your accountant whether to send a little more to cover charges, and keep the evidence of what was sent and what arrived.
Recording the payment and the charges in the books
The books should show two separate things: the tax paid, and the cost of paying it.
- The tax is the rand amount SARS received, recorded against the liability it settles.
- The bank charges are an expense of the business, recorded separately, not netted off the tax.
If the business keeps its books in Achekam, the payment is matched when it appears on the bank statement of the account it was paid from. Bank lines are matched by suggestion and a person accepts each match. A bank line that is not yet in the books becomes a suggested journal that a person approves, and a bank reconciliation completes only when no difference remains or every leftover line has been explained.
Bank charges and any adjustment between the amount you sent and the rand amount SARS received can be put through a manual journal. A business can post manual journals; an unbalanced journal, or one dated in a closed month, is refused, and a posted journal is corrected only by a reversal. How the foreign-currency side of the payment is recorded is a question to settle with your accountant.
Before you send the instruction
Confirm that the foreign route applies to you, take the payment reference from the return or statement, instruct your bank in rand to SARS-FOR-999 at First National Bank with charges for your account, and send it with more than three days to spare. Then keep the bank's confirmation with the return it paid.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
