Taxes in South Africa: when, how, and why you need a SARS tax number

Whether you’re a South African expat living abroad or a newcomer to South Africa, understanding the tax system and obtaining and maintaining a Tax Number from the South African Revenue Service (SARS) is vital to fitting in and getting on with life. This handy guide will answer all your questions about your SARS tax number application, walking you from eligibility to online registration.

Your personal SARS Tax Number – your ticket to the South African tax system

What do you need a SARS Tax Number for?

1. Employment: If you’ll work in South Africa, even temporarily, you’ll need a SARS tax reference number. Your employer will require it to deduct taxes at source.
2. Earning income in South Africa: This applies to any income generated within South Africa, such as rental income from property ownership, freelance work, or investment returns.
3. Tax residency: South Africa operates on a residence-based tax system. Even if you reside abroad, you might be considered a tax resident if you meet specific criteria, such as ordinarily residing in South Africa. In such cases, a SARS tax number is necessary.
4. Tax refunds: If you’ve overpaid taxes in South Africa, a SARS tax reference number is essential to claim a refund.
5. Investing in South Africa: Certain investment opportunities in South Africa may require a SARS tax number for identification and tax purposes.

How to apply for a SARS Tax Number

The good news is you can conveniently apply for a SARS Tax Number online. Here’s what you’ll need when applying for a SARS Tax Number for the first time:

• Valid South African ID or Passport: This verifies your identity.
• Contact information: Provide your South African residential address (along with proof of residence), phone number, and email address.
• Banking details: You’ll need your South African bank account details to claim refunds or pay taxes electronically.

SARS tax number online application – the SARS eFiling registration process

1. Visit the SARS website (https://www.sars.gov.za/) and navigate to the “Register” section.
2. Choose “Individual” registration.
3. Follow the prompts, providing your personal details and required documents.
4. Once submitted, SARS will process your tax number application.

SARS Tax Number confirmation and verification

You’ll receive a notification and a temporary tax number upon successful registration. Once SARS verifies your information, they’ll send you your official Tax Number Confirmation Letter, also known as a Notice of Registration (IT150), that shows your tax reference number. This letter proves your tax registration and contains your unique Taxpayer Identification Number (TIN).

South African expat living abroad? You’re going to want to read these articles:

• Do I still need to submit my South African tax returns if I’ve emigrated?
• How do I declare foreign income on my tax return?
• Ticking the non-resident box was not enough, expats must confirm tax status with SARS urgently.
• What happens if you ceased tax residency in South Africa a number of years ago without notifying SARS?

How to get a Tax Number for a deceased person in South Africa

Unfortunately, deceased individuals cannot hold a tax number. However, if you’re dealing with the estate of a deceased person with outstanding tax matters, you’ll need to contact SARS for guidance at 0800 00 7277.

SARS Business Tax Registration – the lowdown on Tax Numbers for your enterprise

When does your business need to register for a Tax Number with SARS?

• Company tax: If your business generates income in South Africa, you’ll need to register for company tax, which involves obtaining a company tax number.
• VAT registration: Businesses exceeding a specific annual turnover threshold must register for Value Added Tax (VAT). This process assigns a VAT registration number.

It must be noted that VAT registration can be a more complex process than company tax registration. Consulting with a tax professional is recommended to ensure you meet all the requirements and understand the ongoing VAT filing obligations.

How to register your business with SARS

• SARS eFiling: If you’re just beginning and need to register your company, you’ll need to reach out to the Company and Intellectual Property Commission (CIPC). It’s important to note that companies must first register with the CIPC before they can register with SARS for an Income Tax reference number. After registering with the CIPC, SARS will automatically issue an Income Tax reference number. The taxpayer must then sign up on eFiling to conduct transactions electronically.
• Branch application: Business registration forms can be submitted at a SARS branch office near you.

Securing a SARS Tax Number is a relatively straightforward process that empowers you to fulfil your tax obligations and claim any benefits and deductions you’re entitled to. Remember, regardless of residency status, staying compliant with South African tax laws is essential.

FinGlobal: South African tax specialists

If you’d rather trust the professionals to handle the complexities of your SARS tax compliance status, that’s perfectly understandable. At FinGlobal, our team of dedicated tax specialists is ready to provide you with expert assistance on all your tax-related matters, from tax returns to tax clearance and refunds, expat tax compliance and more. Whether you’re a newcomer to South Africa or a South African expat now living abroad, we’ll ensure you’re appropriately registered for all of the relevant tax products (personal and business) and guide you every step to achieving and maintaining SARS tax compliance.

To find out more about FinGlobal’s hassle-free, trusted tax services, leave your contact details with us, and we’ll contact you to discuss how we can help.