With the 2025 eFiling season currently underway, knowing your SARS status is more important than ever. SARS has recently introduced changes requiring taxpayers to confirm whether they are tax resident or non-tax resident when submitting their annual tax returns. Submitting the wrong declaration could lead to compliance issues, penalties, or audits — making it crucial to know your current SARS-held status before you file.
Why the Report Is Needed
A Tax Diagnostic Report is the first step in understanding your standing with SARS. It provides a comprehensive “health check” of your tax profile, identifying any compliance issues, outstanding returns, penalties, or administrative updates required. Without this insight, taxpayers often make decisions based on assumptions rather than facts, a risky move when it comes to SARS.
This non-invasive review of a taxpayers eFiling profile, through investigating the records held by SARS, is the surest way to safely check your status without triggering unnecessary interest from the tax authority.
What the Tax Diagnostic Can Discover
This all-encompassing process, can identify:
- Residency status confirmation – By ensuring that your SARS record reflects the correct tax residency status before you submit your return, the correct rules and disclosures are applied. Remember that South African tax residents are taxed on their worldwide income, while non-resident taxpayers only pay tax on South African sourced income. Changing your tax residency status with SARS entails a formal process and does not happen automatically when you leave the country.
- Compliance gaps – Any form of non-compliance could impact future applications such as tax clearance, refunds, or financial emigration.
- Outstanding returns or tax debt – This requires immediate attention. Even small amounts can grow with interest and penalties if left unresolved.
- Outdated or incorrect personal details – Many expatriates forget to update SARS when they change addresses, phone numbers, or email addresses.
- Inactive or deregistered tax numbers – These may need to be reactivated before any submissions or applications can proceed.
- SARS security details update – These are often used to move profiles over to another tax practitioner or to log in to your SARS profile. This is a security measure implemented by SARS to protect both taxpayers and tax professionals, ensuring that access to your profile is properly authorised.
Planning Around the Findings
For clients with more complex structures, such as those with business interests, multiple income streams, or cross-border tax exposure, the findings of the report can be the basis for a targeted compliance plan. This may involve:
- Structuring payments for tax debt.
- Submitting historic returns to bring the profile up to date.
- Confirming your tax residency status to ensure the correct type of return is filed.
- Correcting details to ensure SARS correspondence reaches you.
- Coordinating with a tax professional to avoid future compliance risks.
Engaging a Tax Professional
If tax debt, incorrect residency status, or compliance issues are discovered, the best approach is to work closely with a qualified tax professional.
They are best placed to negotiate with SARS on your behalf, submit requests for penalty remission, manage the reactivation or registration of your tax number and handle secure updates to your SARS profile and SARS security details.
Even more important, a tax specialist will guide you on the correct resident or non-resident return submission.
The Power of Knowing
Knowledge is power when it comes to tax compliance. A Tax Diagnostic Report puts you in the driver’s seat by revealing exactly where you stand with SARS. Armed with this certainty, you can avoid surprises, file your return confidently, and steer clear of costly penalties.
