Compliance 4 min read

Tax Clearance for Government Tenders: What You Need to Know

How to get a tax clearance certificate or tax compliance pin for South African government tenders. Step-by-step SARS process and common issues explained.

Why Tax Clearance Is Required

Every government tender in South Africa requires proof that your business is tax compliant. This is mandated by the Preferential Procurement Policy Framework Act (PPPFA) and enforced through the Central Supplier Database (CSD).

If your tax affairs are not in order, your bid will be disqualified — no matter how good your proposal or how competitive your price.

Tax Compliance Pin vs Tax Clearance Certificate

Tax Compliance Pin (Current System)

SARS has moved from issuing paper tax clearance certificates to a Tax Compliance Status (TCS) system with a unique PIN:

  • The PIN is a unique code linked to your tax profile
  • Government departments verify your compliance status directly with SARS
  • The PIN is valid as long as your tax affairs remain in order
  • You share the PIN with the procuring department, who verifies it online

Legacy Tax Clearance Certificate

Some older tender documents still reference a "tax clearance certificate." In practice, the TCS PIN has replaced this, but you may still need to provide a printout of your tax compliance status.

How to Get Your Tax Compliance PIN

Step 1: Ensure All Returns Are Filed

Before applying, make sure all the following are up to date:

  • Income Tax returns (IT12 for individuals, ITR14 for companies)
  • VAT returns (if registered for VAT)
  • PAYE returns (if you have employees)
  • UIF declarations
  • SDL (Skills Development Levy) returns

Step 2: Clear Any Outstanding Debt

If you owe SARS money:

  • Pay the outstanding amount in full, OR
  • Enter into a payment arrangement with SARS — this counts as compliant
  • Request a suspension of payment if you are disputing an assessment

Step 3: Apply via eFiling

  1. Log into SARS eFiling (www.sarsefiling.co.za)
  2. Navigate to Tax Compliance Status > Request
  3. Select the reason: Tender or Good Standing
  4. Submit the request
  5. SARS will process and issue your TCS PIN (usually within 24-48 hours)
  6. You can also request it at a SARS branch office

Step 4: Share Your PIN

  • Include the PIN in your tender submission
  • The government department will verify it directly with SARS
  • No paper certificate needed in most cases

Common Issues and How to Fix Them

"Non-Compliant" Status

Cause: Outstanding returns or debt with SARS

Fix:

  1. Log into eFiling and check which returns are outstanding
  2. File all outstanding returns
  3. Pay any debt or enter into a payment arrangement
  4. Re-apply for your TCS PIN after 24-48 hours

Delays in Processing

Cause: SARS system processing times

Fix:

  • Apply well in advance (at least 2 weeks before your tender deadline)
  • If urgent, visit a SARS branch with your ID and company documents
  • Call the SARS Contact Centre: 0800 00 7277

PIN Rejected by Department

Cause: Usually a timing issue — the PIN was checked after your compliance lapsed

Fix:

  • File any returns that became due since you got the PIN
  • Request a fresh TCS PIN
  • Contact the procuring department to explain and provide the updated PIN

New Company — No Tax History

Cause: Recently registered company with no filing history

Fix:

  • Register for all applicable tax types (Income Tax, VAT if applicable, PAYE if applicable)
  • File a nil return for the first period if no activity yet
  • Apply for TCS — a newly registered company with no outstanding obligations should be compliant

Tips for Staying Compliant

  1. File returns on time, every time — set calendar reminders for VAT (every 2 months), PAYE (monthly), and Income Tax (annually)
  2. Use a tax practitioner — the cost is worth avoiding compliance issues that can lose you tenders
  3. Check your status monthly — log into eFiling and verify your compliance status before each tender submission
  4. Keep your banking details updated with SARS — incorrect details can cause payment issues that lead to debt
  5. Respond to SARS correspondence immediately — ignoring a letter can escalate to non-compliance

CSD and Tax Compliance

Your tax compliance status is automatically verified through the CSD. When you register on the Central Supplier Database, SARS integration checks your compliance status. If you are non-compliant:

  • Your CSD registration will show a tax status of "Non-Compliant"
  • Government departments will see this when verifying your CSD report
  • Your bid will be disqualified on administrative grounds

Next Steps

  1. Check your tax compliance status on SARS eFiling
  2. Register on the CSD if you have not already
  3. Browse current tenders on AITenders
  4. Learn how to write a winning tender