At some point a client, a bank, or a government department will ask you to prove your tax affairs are in order.
What they are asking for is your Tax Compliance Status. It replaced the old paper Tax Clearance Certificate in 2015, and it works quite differently to the document most people still picture.
Here is what it is, what makes you non-compliant, and why the difference between the old certificate and the new system catches people out.
What Tax Compliance Status Actually Is
Tax Compliance Status, usually shortened to TCS, is SARS's digital record of whether your tax affairs are in order.
Instead of issuing a certificate, SARS issues you a security PIN. You give that PIN to whoever needs to check your status, along with your tax reference number. They enter it on eFiling or through the SARS Online Query System and see your status immediately.
The result is colour-coded. Green means your tax affairs are compliant. Red means they are not.
The Part Most People Get Wrong
A TCS PIN Is Not a Certificate
A TCS PIN is not a certificate. It is a live window into your SARS profile.
SARS states that when the PIN is used for verification, the result reflects your tax compliance status at the date and time the PIN is used.
This means a PIN that showed green last month will show red today if something has since gone wrong. A return that became outstanding. A payment that was missed. A registration detail that fell out of date.
The old paper certificate was a snapshot that stayed valid. The PIN is not. Whoever you gave it to sees your position as it stands whenever they check, not as it stood when you sent it.
What Makes You Compliant
SARS sets out clear criteria. To be compliant, all of the following must be true:
You have no outstanding tax returns.
Every return across every tax type you are registered for must be submitted. A single unfiled prior-year return is enough to turn your status red.
You have no outstanding debt to SARS.
Any amount owing makes you non-compliant, unless you have a formal payment arrangement in place with SARS.
You are registered for all the tax products that apply to you.
If you should be registered for VAT, PAYE, or provisional tax and you are not, that counts against you.
Your registered details are up to date.
The details SARS holds for you need to be current, so anything that changed and was never updated counts against you.
Your tax reference numbers are merged or declared.
Taxpayers who have picked up duplicate reference numbers over the years need these resolved.
The Two Types of TCS Application
There are currently two application types on eFiling.
Good Standing
The general-purpose application. This is what you use for tenders, contracts, finance applications, and any situation where someone needs to confirm your tax affairs are in order.
Approval for International Transfer
Required for South African residents transferring funds abroad, and for non-residents.
Worth noting: the separate Tender application type no longer exists. SARS has consolidated it into the Good Standing application, so a tender request is now handled under Good Standing.
Why It Matters Before You Need It
The pattern we see is always the same. A business owner finds an opportunity, gets asked for a TCS PIN, requests one, and discovers a problem they did not know about.
By then the deadline for the tender or the finance application is usually days away.
What typically causes the red status:
An outstanding return from a prior year that was forgotten. A small balance owing that was never settled. A VAT or PAYE registration that should have been done when the business crossed a threshold. Contact or banking details that were never updated after a change.
None of these are difficult to fix. All of them take time to resolve, particularly if a return needs to be prepared and submitted from scratch.
Check your status when you do not need it. That is when there is time to fix whatever is wrong.
You can request your own TCS PIN on eFiling at no cost. Checking it is quick.
If it comes back red, you at least know now rather than in the week a contract depends on it.
Is Your Status Green?
If your TCS is showing non-compliant, or you want to make sure it stays green, we resolve outstanding returns, sort out registrations, and keep your SARS profile in order.
Important: This article provides general guidance for South African taxpayers and businesses. Every situation is unique. Consult a qualified accounting professional for advice specific to your circumstances.