It has become more cumbersome to prove tax compliance, thanks to SARS’ strict new system.
Tax Consulting SA says the process of applying for tax clearance from the South African Revenue Service has just become more difficult, which will impact anyone wanting to take money out of South Africa., including how it is defined and processed within the revenue service’s systems.
“The purpose of these enhancements is, according to SARS, to facilitate the consolidation of Foreign Investment Allowance and Emigration applications into a single application, ‘Approval International Transfer’,” said Tax Consulting SA.In simple terms, a TCS PIN is a modern version of a Tax Compliance Certificate. It allows third parties, such as an individual, a company, or a government entity, to verify whether you or your business, is tax compliant.
A taxpayer resident for tax purposes in South Africa can send up to R1 million out of South Africa per calendar year – called their Single Discretionary Allowance . For any spending beyond this, however, TCS PIN approval is needed to remit further amounts in that year. “The additional information requested on the Approval for International Transfer Application allows SARS to ensure that all required tax payable has been accounted for and, if required, address any non-compliance that is detected through a verification and/or an audit,” Tax Consulting said.
For non-residents, the effective date of non-residency is required, as well as proof of their non-residency and their current country of tax residency.“The form operates on a compulsory field basis, so all the requested details must be completed. This can start with seemingly simple details, such as trust interests, shareholding, and loans to trusts internationally,” said Tax Consulting SA.