Since the South African Revenue Service (SARS) announced the changes to the Tax Compliance Status (TCS) process, the media has been abuzz. To cut through this noise, Tax Consulting South Africa and the Financial Planning Institute of South Africa (FPI) held a short webinar on 10 May 2023 unpacking all these changes, with a step-by-step walkthrough of the new process.  

SARS’ changes to the TCS process

The session, presented by Jerry Botha (Managing Partner at Tax Consulting South Africa), was held exclusively for FPI members and highlighted exactly what has changed since 24 April 2023. The most prominent being:

• The consolidation of the “Emigration” TCS pin and the “Foreign Investment Allowance” TCS Pin to create the new “Approval for International Transfer” (AIT) TCS Pin;
• The removal of the Tender option and the need to choose the Good Standing TCS pin for all other scenarios where a 3rd party wants to verify a taxpayer’s compliance; 
• The increase in the number of required supporting documents; and 
• The need to disclose local and foreign assets and liabilities at cost.

Jerry went on to discuss SARS’ media statement, which stated that these changes, or “enhancements” aim to “dramatically improve turnaround times” for compliant taxpayers and traders seeking to transfer funds out of South Africa. He went on to note that these changes align with SARS’ goal to modernise its systems and processes to ensure compliance. 

Compliance is key  

This sentiment was further reinforced when Jerry highlighted the changes in section 235(2) of the Tax Administration Act. Tax practitioners and financial planners are advised to be aware that any submission of false documentation or statements on behalf of their clients is considered an offence, regardless of negligence.

From there, Jerry walked attendees through the new AIT process and highlighted where and how the changes have come into effect. Following this section, all 300 attendees were asked whether they believed the process is easier or the same as the previous system: 

• 88% of attendees noted that the AIT process is significantly different with materially more work.
• 70% of attendees noted that most people will not be able to complete this new AIT TCS process without assistance.

Overall, the majority agreed that the system comes across as quite complex and that those applying for an AIT Pin should acquire aid from both a financial planner and a tax practitioner. 

Knowledge sharing

As this new TCS process poses new challenges, and with the increased compliance risk for both taxpayers and tax professionals, there is a need for more technical sessions. In that regard, in the coming weeks, Tax Consulting South Africa has been approached to host various in-depth, technical webinars for respective SARS Recognised Controlling Bodies. 

The training sessions provide an excellent opportunity for industry professionals to actively engage with and learn from their peers. It will foster a deeper understanding of these changes while learning how to accurately complete an AIT application, along with how to better communicate these changes to one’s clients to ensure full compliance.

Submitted by Tax Consulting SA