A tax clearance certificate is a document issued by the South African Revenue Service (SARS) that confirms that a business has complied with its tax obligations. For new businesses in South Africa, obtaining a tax clearance certificate is an important step in ensuring compliance with tax laws and regulations.
What is a Tax Clearance Certificate
A Tax Clearance Certificate is a document issued by the South African Revenue Service (SARS) that confirms that an individual or business is in compliance with their tax obligations. It serves as proof that all outstanding tax returns have been submitted and all taxes owed have been paid up to date.
A Tax Clearance Certificate is required in various circumstances, such as:
- Tendering for government contracts: Businesses are required to submit a Tax Clearance Certificate when bidding for government tenders or contracts.
- Applying for certain licenses: Some professional and business licenses require a Tax Clearance Certificate as a condition for approval.
- Applying for loans: Banks and financial institutions may require a Tax Clearance Certificate as part of the application process for loans or financing.
- Conducting business with other companies: A Tax Clearance Certificate may be requested by other businesses when engaging in transactions with your company.
The certificate is issued by SARS upon request and is valid for 12 months from the date of issue. To obtain a Tax Clearance Certificate, you need to have submitted all outstanding tax returns and paid all taxes owed to SARS. Once SARS has verified that all tax obligations are up to date, they will issue the Tax Clearance Certificate to you.
A Tax Clearance Certificate from SARS is a document that confirms that an individual or business is in compliance with their tax obligations. It is required in various circumstances and serves as proof that all outstanding tax returns have been submitted and all taxes owed have been paid up to date.
How to Get SARS Tax Clearance Certificate for New Business
Here are the steps to obtain a tax clearance certificate for a new business from SARS:
- Register for tax: The first step to obtaining a tax clearance certificate is to register for tax with SARS. This involves obtaining a tax reference number and registering for the appropriate tax types, such as income tax, value-added tax (VAT), and employee taxes.
- File tax returns: Once the business is registered for tax, it is required to file tax returns with SARS on a regular basis. The frequency and type of returns required will depend on the type of taxes the business is registered for.
- Pay taxes: In addition to filing tax returns, the business is required to pay the taxes owed to SARS on time. This includes income tax, VAT, and employee taxes.
- Apply for a tax clearance certificate: Once the business has filed all of its tax returns and paid all of the taxes owed, it can apply for a tax clearance certificate from SARS. This can be done online through the SARS eFiling system or in person at a SARS branch.
- Wait for processing: Once the application has been submitted, SARS will process the application and verify that all taxes have been paid and all tax returns have been filed. If everything is in order, SARS will issue a tax clearance certificate to the business.
Obtaining a tax clearance certificate for a new business from SARS involves registering for tax, filing tax returns, paying taxes, and applying for the certificate. It is important to ensure compliance with tax laws and regulations to avoid penalties and legal issues, and to ensure the smooth operation of the business.