SARS Compliance: The Complete Checklist

Introduction

SARS compliance is the single most critical factor in shelf company valuation. A company that's clean with SARS can sell in 48 hours. One with compliance gaps can take months—or become unsellable. This checklist helps you verify your company's SARS standing before approaching a buyer.

The SARS Compliance Checklist

1. Tax Compliance Pin (TCP) Status

• Company has a valid Tax Compliance Pin from SARS
• TCP is current (not expired or flagged)
• TCP confirms no outstanding tax debt
• No restrictions or compliance directives on the TCP

2. Income Tax Returns

• Annual IT33 returns filed for all required years
• No returns marked as "non-filing"
• All assessment notices received and understood
• No outstanding IT assessments under appeal
• All SARS correspondence addressed

3. VAT Returns (if VAT Registered)

• All monthly/quarterly VAT201 returns filed
• No VAT returns outstanding or overdue
• No VAT assessments under dispute
• VAT refunds (if applicable) received or reconciled
• VAT account shows zero balance or credit

4. PAYE & Employment Tax (if applicable)

• IRP501 employee submissions made correctly
• No employees on company books (for dormant companies)
• If historical employees exist, all PAYE settled
• Unemployment Insurance Fund (UIF) compliance current
• No unresolved payroll tax disputes

5. Provisional Tax (if applicable)

• PT declarations made on time (if required)
• Provisional tax payments made where required
• No provisional tax debt outstanding

6. Tax Audit Status

• No active SARS audits or investigations
• All past audits concluded (if any)
• No SARS Section 34 enforcement letters
• No tax evasion allegations or notices

7. CIPC Annual Returns

• Annual returns filed with CIPC for all years
• No CIPC compliance notices outstanding
• Company not flagged for deregistration
• Director information matches SARS records

8. Debt & Liability Status

• No outstanding commercial debt
• No payment arrangements with SARS (must be settled)
• No garnishee orders against the company
• No legal claims or pending litigation

How to Verify Your Compliance Status

Step 1: Request Your Tax Compliance Pin

Log into SARS eFiling portal or contact your tax practitioner to request a current Tax Compliance Pin. This is the fastest way to confirm no outstanding debt.

Step 2: Download Your SARS Transcript

Request a full tax transcript from SARS. This shows all filed returns, assessments, and payments. You can download this from eFiling or request it by post.

Step 3: Check for Audit Notices

Search SARS eFiling for any audit notices, Section 34 enforcement letters, or compliance directives. If you're unsure, contact your tax practitioner.

Step 4: Verify CIPC Registration

Visit www.cipc.co.za and search your company registration number. Confirm:

• Company is still active (not deregistered)
• Directors listed match your records
• Company status shows "active"

Step 5: Get Professional Verification

Have your accountant or tax practitioner review your compliance status. They can identify gaps you may have missed.

Red Flags That Block Sales

The following issues will prevent your company from selling until resolved:

• Outstanding SARS debt: Must be paid in full
• Active audit: Must be concluded
• Late returns: Must be filed immediately
• SARS directives: Must be complied with
• CIPC deregistration: Must be halted and reversed
• Fraud allegations: Must be cleared by SARS

If You Have Compliance Gaps

For Late Returns:

File immediately. SARS will assess penalties, but the company remains sellable once filed. Factor the penalty cost into your sale negotiations.

For Small Outstanding Debt:

Pay the debt. Once paid, your company is clean. Request a Tax Compliance Pin confirmation.

For Active Audits:

Work with your accountant to expedite audit conclusion. You cannot sell until the audit is closed.

For Payment Arrangements:

Settle the arrangement or pay the full debt. Payment arrangements must be cleared for a clean sale.

The Bottom Line

SARS compliance is binary: either your company is clean or it isn't. There's no middle ground. Before contacting a buyer, ensure you check every item on this checklist. If anything is unclear, get professional verification.

A fully compliant company sells fast and for maximum value. Incomplete compliance causes delays and reduces offers significantly.