Recently, the South African Revenue Service (SARS) announced that it would no longer be issuing printed tax clearance certificates (TCCs). The announcement was not unexpected as SARS had already indicated in 2015 when the tax compliance status (TCS) system was implemented, that it would cease issuing printed TCCs at a future date.
In Circular 23/2019, FinSurv announced several changes, including the following, which are reflected in the amended version of the Currency and Exchanges Manual for Authorised Dealers (ADManual):
- Section B.2(B)(i)(d) of the AD Manual, which deals with the FIA and previously made reference to the TCC, now states that when an authorised dealer allows a taxpayer to transfer funds abroad using her FIA, authorised dealers must use the TCS PIN to verify the taxpayers TCS via SARS eFiling prior to effecting any transfers. Authorised dealers must ensure that the amount to be transferred does not exceed the amount approved by SARS. Authorised dealers should note that the TCS can expire and should authorised dealers find that the TCS PIN has indeed expired, then the authorised dealer must insist on a new TCS pin to verify the taxpayers tax compliance status;
- Section B.2(B)(i)(m) of the AD Manual, which deals with applications by individuals to invest in excess of the annual FIA limit of R10 million abroad in a calendar year, now states that authorised dealers must use the TCS PIN to verify the taxpayers TCS via SARS eFiling prior to effecting any transfers. Authorised dealers should note that the TCS PIN can expire and should authorised dealers find that the TCS PIN has indeed expired, then the authorised dealer must insist on a new TCS PIN to verify the taxpayers compliance; and
- Section B.4(G)(i)(d) of the AD Manual, which deals with the use of the FIA in the case of a South African resident temporarily abroad. This section states substantially the same to what is in section B.2(B)(i)(d) of the AD Manual, referred to above. (We discussed the exchange control rules applicable to residents temporarily abroad in our Tax & Exchange Control Alert of 29September 2017.
In Circular 24/2019, FinSurv announced further changes, including the following, which are reflected in the amended version of the AD Manual:
- Section B.2(J)(i)(b) of the AD Manual, which deals with emigration by individuals for exchange control purposes and previously made reference to the TCC, now states that all emigration applications must be accompanied by a duly completed Form MP 336(b) signed by the applicant, together with a printed TCS verification result obtained via the SARS TCS system reflecting the compliance status of the applicant(s) including a breakdown of the remaining capital assets held in South Africa. All subsequent transfers by emigrants will depend on the current TCS at the date and time the TCS PIN is used. A TCS PIN will be issued where the remaining value of the assets on emigration are above the limits outlined in subsection B.2(J)(ii)(a) of the AD Manual and a TCS PIN Good Standing will be issued where the remaining value of the assets on emigration are within the limits outlined in subsection B.2(J)(ii)(a);
- Sections B.2(J)(v)(a)(hh) and B.2(J)(v)(a)(ii) of the AD Manual, which deal with the transfer of an individuals assets abroad pursuant to an individuals emigration for exchange control provision, also now refer to providing the TCS information to the authorised dealer instead of a TCC; and
- A new provision, namely section B.2(J)(v)(a)(ll), which also deals with emigration and which states that pursuant to a persons emigration, all previously undeclared assets, excluding where the assets represent an inheritance and/or insurance policies, must be referred to SARS for a tax directive. Subsequently, an application must be submitted to FinSurv accompanied by a printed TCS verification result obtained via the TCS system reflecting the compliance status of the applicant(s) including the value of the capital assets declared to and approved for transfer by SARS.
Article: SATAXGUIDE
