Deregistration of Tax Types – part 2 of 2

This article (2 of 2) outlines the relevant procedures to be followed when a taxpayer applies for deregistration of a tax type. Please read part 1 before reading this article.

Who can request the deregistration of tax types?

• An Individual Taxpayer
• An executor of a deceased estate
• A curator for an Insolvent estate
• Representative of a Company (Public Officer), Co-Operative
• Main member of a CC
• Representative of a Government entity
• Main Trustee for a Trust

When will an entity deregister?

• When a Company/CC, Trust, Co-operative, or any other type of entity is dormant or no longer in operation.
• When deregistration was initiated internally by SARS.
• When an entity has a duplicate reference number.
• When a taxpayer who formally emigrated from South Africa or a non-resident taxpayer who left the republic, has no income and assets in the Republic.
• When a deceased, insolvent, or liquidated estate comes into effect.

Common Tax types to deregister:

Value-Added Tax (VAT)
Pay-As-You-Earn (PAYE)
Income Tax
Turnover Tax
Skills Development Levy (SDL) and/or
Unemployment Insurance Fund (UIF)

Deregistration process VAT and PAYE

VAT
A written request for deregistration can be submitted via an appointment.
Fully completed VAT123e or VAT123T in the case of a separate registered enterprise/branch/division (date business ceased trading is mandatory).

PAYE
A written request for deregistration can be submitted via an appointment OR sent to these email addresses :
Tax Practitioners: pcc@sars.gov.za
Taxpayers: contactus@sars.gov.za

To make it easier for employers to request deregistration without any additional supporting documents/written requests (EMP123/written notification), new system channels have been introduced, whereby an employer can request deregistration for PAYE/SDL/UIF (eFiling- Registration Maintenance).
A fully completed EMP123 (date business ceased trading is mandatory)/written notification.

Deregistration process for PAYE, SDL, and UIF

An employer must request in writing for the deregistration as an employer:

• Within 14 business days after an employer‘s activities have ceased;
• Within 14 business days after the business has been sold.
• This process must be done on eFiling or a written request must be sent to SARS.
• The SDL registration will be cancelled if the total remuneration for employees will not exceed R500 000 per annum.

When PAYE is still active, UIF must be registered with SARS. Only when PAYE is cancelled on the SARS record, will UIF be automatically cancelled on the SARS record. The UIF payments must be done with the Department of Labour.

Turnover Tax Deregistration

There are two instances in which a registered micro business may be deregistered from turnover tax by SARS, namely, COMPULSORY or VOLUNTARY.

There must be no outstanding TT03 (Turnover Tax Returns).
A request can be done via the branch office (appointment).
12 months’ bank statements must accompany the application; 12 months bank statement dates to end the day before the application is done.
Reasons, in writing for applying to de-register.

The following e-mail addresses can be used to send the written request:
Tax Practitioners: pcc@sars.gov.za
Taxpayers: contactus@sars.gov.za

Supporting documents required upon deregistration

Companies:
• The taxpayer must apply at CIPC for deregistration before SARS can proceed with deregistration.
• CIPC requires you to be Tax Compliant before they consider your application therefore it is important to ensure your tax compliance with SARS.
• Proof of deregistration from CIPC must be presented to SARS.
• 12 months banks statement that ends on the day before the application date to deregister

Trusts:

• Letter from the Master High Court to confirm the termination date, including minutes of the trustees’ meeting in which a resolution was taken to deregister the trust.
• Distribution list and or financial statements until the termination date.

Common Errors made by Taxpayers upon deregistration that cause delays – Top 5 errors

• CIT deregistration – no FINAL Deregistration or AR Final deregistration documents from CIPC attached
• PIT (non-resident coding for individuals) – Confirmation of the date the person left South Africa, copy of passport
• VAT deregistration – VAT123 (cancellation of VAT number) not fully completed with the applicable dates of suspension and declaration not signed
• PAYE deregistration – EMP 123 (cancellation of Paye number) not fully completed with the applicable dates of suspension and declaration not signed
• Request for all tax types deregistration coming through the Email Channel – no Power of attorney and well as a copy of ID for the representative person

The essence of the process is that the applicant must gather all the required documentation and ensure that all the relevant forms and means of communication are fully complied with. Your tax obligation remains in effect until such a time that the Commissioner and SARS are satisfied with what you have presented.

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