Tax compliant – what is it?
This process of tax compliance, or the status of being tax compliant, is SARS (South African Revenue Service) stating to you that you are all “up to date” with your tax affairs. This refers to your personal or companies tax affairs. In this article, ‘you’ relates to your personal affairs or a companies affairs.
How do I do it?
This process of getting to being tax compliant is not a difficult one at all. In order to be compliant, you must have all your returns and submissions sorted out. This means for every tax type you are registered for, not only income tax. If they are all submitted on time, then you are always going to be compliant.
If you have not submitted a return(s), then you will have to submit the return(s) to SARS in order to be tax compliant once more.
Why am I not tax compliant?
There are only a few reasons why you would not be compliant. They are:
- All documents have not been sent to SARS
- These are the basic documents that SARS require to register you as a taxpayer
- Returns outstanding
- Any returns of any tax type that are outstanding will cause you to be non-compliant
- If you are compliant with income tax but have a VAT return outstanding, you are deemed non-tax compliant.
- Outstanding debt.
- Any amount that has been incurred, by not submitting any return in the given time frame, will cause you to be non-compliant.
- This may be:
- Fines and penalties for late submission
- Interest on outstanding debt
- It also includes any amount not paid for a return submitted.
- Example: if you submitted an income tax return and owe R 15 632.54 for that return but don’t pay on time, you are liable for the R 15 632.54 AND the penalties and interest on that amount because of late submission
- Disputes pending
- SARS have a system where you are able to dispute a decision they have taken.
- If you don’t agree with anything, you can ‘dispute’ this and follow a process set out by them. It is a system that works and they do listen to your side of things and can (do) reverse their decision IF warranted.
- However, until that dispute is settled, you are non-compliant
Read here for more on company tax returns