Most South Africans know they should keep their tax records. Very few know exactly what to keep, how long to keep it, or when the retention period actually starts.
Getting this wrong has real consequences. SARS can disallow a deduction you legitimately claimed if you cannot produce the supporting document. A missing invoice is not just untidy bookkeeping. It is a potential tax liability.
Here is what the law requires.
Who Must Keep Records
The Tax Administration Act requires the following people to keep records:
- Anyone who filed a tax return
- Anyone who was required to file a return but did not
- Anyone who received income, had a capital gain or loss, or engaged in any activity subject to tax during the period, even if no return was required
- Anyone who would have been required to file but qualified for an exemption or fell below a threshold
In practice, this means almost every individual who earns income and every business that operates in South Africa has a legal obligation to maintain records.
What Records Must Be Kept
The law requires you to keep books of account and documents that support what you declared on your return, or that demonstrate your liability or non-liability for tax.
For individuals this typically includes:
- IRP5 and IT3(a) certificates from employers
- Medical aid tax certificates
- Retirement annuity contribution certificates
- Bank statements
- Invoices and receipts for deductions claimed, such as rental expenses, home office costs, or Section 18A donations
- Records of any freelance or consulting income
For businesses this typically includes:
- Financial statements
- Ledgers, cash books, and journals
- All sales invoices issued
- All supplier invoices received
- Bank statements
- VAT201 returns and the tax invoices supporting them
- PAYE records including EMP201 submissions and employee IRP5 certificates
- Asset registers for wear and tear claims
If you claimed it on your return, you need a document to support it.
How Long Must You Keep Records
The Tax Administration Act requires records to be kept for five years from the date of submission of the return.
Two important points most people get wrong:
The five years runs from when you submitted the return, not from when the transaction happened.
An invoice from March 2024 relates to the 2024 tax year. If the return for that year is submitted in February 2026, the five-year retention period runs until February 2031. That invoice is nearly seven years old by the time you can safely dispose of it.
If you never submitted a return you were required to file, the obligation to retain the records continues until the return is submitted and five years have passed from that date.
For companies, the Companies Act sets a minimum retention period of seven years. Where both Acts apply, keep to the longer period.
When the Clock Stops Running
The Five-Year Period Does Not Always Apply
The five-year period does not apply if SARS has opened an audit, verification, objection, or appeal relating to those records.
Where SARS has commenced any of these processes, records must be kept until the matter is fully concluded, regardless of how long that takes.
Do not dispose of records while any SARS process is still open, even if the normal retention period has passed.
Can You Keep Electronic Records?
Yes. SARS accepts electronic records provided they meet certain requirements.
Electronic records must be kept in a stable and accessible format. PDF, CSV, and exported bank statements are acceptable. Records that can only be accessed through an app or software that may no longer exist in five years are not reliable.
Back up your records. A stolen laptop, a crashed hard drive, or a closed cloud account is not a valid reason for failing to produce a document SARS has requested.
If you want to store electronic records at a location outside South Africa, you must apply to SARS for authorisation to do so.
What Happens If You Cannot Produce Records
Failing to Keep Records Has Consequences
Failing to keep adequate records has practical and legal consequences.
SARS can disallow deductions and input VAT claims you cannot substantiate. Where records are missing, SARS can raise an estimated assessment based on available information. Understatement penalties become more likely where records are incomplete. Failure to keep records as required is an offence under the Tax Administration Act.
The practical rule: keep everything for five years from the date you submitted the relevant return. For companies, keep to seven years. Where SARS has opened any process relating to those records, keep them until it is resolved.
Good record keeping is not just a compliance obligation. It is your first line of defence if SARS ever asks a question.
Not Sure If Your Records Are in Order?
At Accounting Simplified we help businesses set up proper record keeping systems, make sure nothing falls through the cracks, and ensure your books are audit-ready at all times.
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.