What tax compliance status means for a business
The four things SARS checks before it treats a South African business as tax compliant, where to see the status, and what slipping costs payroll.
By Achekam · · 4 min read · For Running a business businesses in South Africa
"Are you tax compliant?" sounds like a yes-or-no question. For SARS it is a status, worked out from your records on its side, and it can change from one week to the next without anyone at your business noticing.
That matters in practice. Buyers can ask to verify it, government tenders turn on it, and at least one payroll incentive depends on it. This article explains the conditions SARS looks at, where your business can see its status, what slipping out of compliance can cost on the payroll side, and how to keep a record that lets you spot trouble before SARS does.
The four conditions
SARS sets out what tax compliance requires. To be tax compliant, it says, a taxpayer must have:
- No outstanding returns. Every return that was due has been submitted.
- No outstanding tax debt, unless a payment arrangement or a suspension has been agreed with SARS.
- Registration for every tax it is liable for. Being up to date on income tax does not help if the business should also be registered for VAT or as an employer and is not.
- Up-to-date registered particulars. The details SARS holds about the business, such as its addresses and contact details, must be current.
The list is short, but each item hides a trap. A business can pay every rand it owes and still be non-compliant because one old return was never submitted. It can submit everything and still fail the test because it never registered for a tax that applied. And it can be fully up to date on filings and payments yet fall short because the details SARS holds about it are out of date.
A status that moves
SARS says a tax compliance status is not static: it changes with the taxpayer's continued compliance. That is the point to take away. A good status last quarter tells you nothing about today.
Think about what moves it. A return falls due and is not submitted. A payment arrives a day late and becomes debt. Someone moves offices and the registered address is now wrong. None of these feels dramatic, and each can change the status.
The other side is also true: putting things right improves the status. A business that finds it has fallen behind should fix the underlying cause, whether that is the missing return, the debt or the stale particulars, rather than worrying about the status itself.
My Compliance Profile on eFiling
SARS says taxpayers can view their status through My Compliance Profile on eFiling. That is the place to look, and it is worth looking regularly rather than only when a customer asks.
For third parties, SARS has changed the route. It says the old Tender option for tax compliance status no longer exists, and taxpayers must use the Good Standing application instead, which gives a PIN that third parties use to verify compliance on eFiling. If a buyer or a government department asks for proof, that PIN is what they need. The process is covered in the tax good-standing PIN for tenders and buyers.
SARS explains the requirements, the compliance profile and the good-standing application on its page on managing your tax compliance status.
What non-compliance can cost payroll
A compliance status is not only about reputation. It can cost money directly.
Take the Employment Tax Incentive (ETI). SARS says employers with unused ETI forfeit it if they do not submit their reconciliation, or if they have a non-compliant status. An employer that has built up unused incentive and then lets its status slip can lose that value.
So for any business claiming the incentive, the compliance status is a payroll matter as well as a tax one. Whoever runs payroll should know the status before the reconciliation period, not after.
Keeping your own record when Achekam files nothing
Achekam helps you prepare what SARS needs, but the filing and paying stay with you, and so does knowing what was filed.
Achekam does not file any payroll return with SARS, and does not pay SARS. It prepares the documents and records what a person filed and paid. For payroll specifically, it prepares the IRP5, IT3(a) and EMP201, and produces the e@syFile import file for the EMP501, but it submits nothing to SARS. A person files, and then records the reference SARS gave.
That recorded reference is useful evidence. If SARS later says a return is outstanding, the reference shows when it was submitted. Make recording it part of filing, not an afterthought.
One part of Achekam is not suitable for this job yet. The obligations list on the Tax Dashboard shows sample data, and obligations added there are not saved. Do not use it as your filing diary. Keep the list of returns, due dates and references somewhere that is saved and that more than one person can see.
A simple register, kept monthly, covers all four of SARS's conditions:
| Column | What it shows |
|---|---|
| Tax type and period | Which return or payment this is |
| Due date | When SARS expects it |
| Filed on, and SARS reference | Evidence the return was submitted |
| Paid on, and amount | Evidence nothing was left as debt |
| Particulars checked | When someone last confirmed SARS's records are current |
The broader list of what stays with you is in what you still file with SARS yourself.
A monthly five-minute check
Once a month, open My Compliance Profile, compare it with your register, and ask three questions: is anything shown as outstanding that we think is filed, is there any debt we did not expect, and has anything about the business changed that SARS should know? Most compliance problems are cheap to fix in the month they start and expensive to fix a year later.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
