Tax Compliance Status for tenders

If you want to bid for tenders, win government or big-corporate contracts, or move money abroad above the ordinary limits, someone is going to ask whether your tax affairs are in order. SARS used to issue a paper certificate for that. It now shows your Tax Compliance Status on eFiling, and a third party checks it in real time with a PIN. If your status is non-compliant when you bid, the bid can be rejected. This guide covers what TCS is, what SARS checks, how to get your PIN and how to keep your status compliant all year.

What Tax Compliance Status is

Tax Compliance Status (TCS) is SARS's real-time view of whether you're up to date and in good standing across all your tax types. SARS used to issue a paper Tax Clearance Certificate, which could be out of date within weeks. It now shows your status live on eFiling. It reads as compliant or non-compliant and updates as your situation changes, so it shows where you stand today.

How TCS PIN verification works

Verification uses a TCS PIN. You generate a PIN on eFiling for a specific purpose and share it with whoever needs it — a government department, a prime contractor, a bank. They use the PIN to check your status directly with SARS, and they see it as it is on the day they check.

• You request a TCS PIN through SARS eFiling for the purpose you need — for example "Good Standing" or a tender
• You give the PIN to the third party who's asking
• They verify your live status with SARS using the PIN
• If your status changes, what they see changes too, so you need to stay compliant after the day you apply

The main types of TCS you might need

When you request a PIN, you pick the purpose. The purposes a business owner is likely to need:

• Good Standing — a general confirmation that you're tax compliant, which tenders and contracts ask for
• Tender — specifically for bidding on contracts and procurement
• Foreign Investment Allowance / transfer — for moving funds abroad above the ordinary annual limit, where SARS wants to see your affairs are in order first, and also used for financial emigration

For day-to-day business development it's Good Standing and tender that matter. Each works the same way: a live status, verified by PIN, generated for the specific purpose.

What SARS checks

To show as compliant you need to be up to date on every tax type. SARS looks at whether:

• You're registered for every tax type that applies to you: income tax, VAT if you're over the threshold, PAYE if you employ people
• All your returns are filed and up to date, including nil returns
• Your SARS balance is paid, or any debt is under a payment arrangement SARS has formally agreed
• Your registered details, including the company's public officer, are current

One overdue VAT201, a forgotten EMP501, a small unpaid balance, or a tax type you never registered for is enough to make your status non-compliant.

Why tenders ask for it

Government departments and large companies can require a valid TCS before they accept a bid. A business that keeps its returns and payments up to date can generate a PIN in minutes when a tender opens. One overdue return can make an otherwise compliant business non-compliant on the day the buyer checks.

How to get and keep a compliant status

1. Make sure you're registered for every tax type that applies: income tax, VAT once you're over the threshold, PAYE once you employ people
2. File every return on time, including income tax, VAT, PAYE and nil returns
3. Clear what you owe SARS, or agree a formal payment arrangement so the debt is treated as compliant
4. Keep your registered details and public-officer information current
5. Log in to SARS eFiling, go to the Tax Compliance Status section, and generate your PIN for the right purpose
6. Check your own status every few months, so you can fix any problem before a tender opens

Causes of a non-compliant status

Check these before a buyer checks your status:

• A return filed late or not at all, including a nil return
• A small outstanding balance, plus the interest building on it
• A tax type you were required to register for and did not, such as VAT once you crossed the threshold or PAYE once you started paying staff
• Outdated registered particulars, or a missing or resigned public officer for the company

If you owe SARS and can't clear it in one go, a formal payment arrangement that SARS agrees to keeps you compliant while you pay it down. Unpaid debt with no arrangement makes your status non-compliant.

Mistakes to avoid

• Treating TCS as a once-a-year certificate. The status is live. It can change between the day you generate a PIN and the day someone checks it.
• Leaving nil returns unfiled. A nil return is still a return, and an unfiled one makes your status non-compliant.
• Only checking when a tender lands. A non-compliant status can take longer to fix than the tender allows.
• Ignoring a small balance. A few hundred rand plus interest is enough to fail the check, and the interest keeps adding to it.
• Missing a required registration. Crossing the VAT threshold or starting to employ people without registering leaves a gap SARS reads as non-compliant.

Checking your own status

Check your own status before you need it. Look at your position on eFiling every few months and clear any outstanding item, as you would chase an overdue invoice. That takes a few minutes, and it keeps your status compliant when a tender opens.

Payment arrangements with SARS

A debt to SARS under an agreed arrangement can still leave your status compliant. If you can't settle in one go, you apply for a formal payment arrangement, and once SARS agrees it and you keep to the instalments, your compliance status can stay green while the debt runs down.

The arrangement only protects you while you keep paying it. Miss an instalment and the status can turn non-compliant again. TCS is a SARS matter, but buyers can check your CIPC standing too, so keep your annual return and beneficial-ownership filings current alongside your tax. A company that CIPC has deregistered for a missed annual return cannot bid, whatever its tax position.

We file returns, track SARS balances and check Tax Compliance Status for clients throughout the year. Talk to us and we'll get you compliant and keep your status ready for tenders.