The purpose of the prescribed payment rules is to ensure that payments to SARS are allocated to the correct tax account of the taxpayer. If these payment rules are not adhered to, SARS will reject the payment. This article will explain the different payment options available to taxpayers and some of the general SARS payment rules.
The following payment options are available for payments made to SARS from South Africa:
- Electronic payment via SARS eFiling
- Electronic funds transfer (EFT) through the taxpayer’s internet banking
- At a SARS branch
- Over-the-counter deposit at a bank
Payments from South Africa’s neighbouring countries (Namibia, Botswana, Lesotho and Swaziland) can be made via EFT through the taxpayer’s internet banking.
Any other payments made from outside South Africa, excluding the neighbouring countries in the previous paragraph, can be made using the SWIFT payment method.
Electronic payment via SARS eFiling
When payment is made through eFiling, a payment reference number (PRN), which links the payment due to the relevant tax return, is automatically generated when submitting the return.
A credit push payment is initiated by the taxpayer via eFiling. SARS then sends a payment request to the taxpayer’s bank. The payment must be authorised by the taxpayer via his/her internet banking before the bank will transfer the money to SARS.
It is important for taxpayers to ensure that the tax return they submit contains the correct declaration of tax due before initiating a credit push transaction as a credit push transaction cannot be reversed after the taxpayer approved it through their internet banking.
EFT via internet banking
The SARS bank accounts into which taxpayers can make payments are pre-populated on the various banks’ internet banking facilities. This means that the taxpayer does not have to create a beneficiary for SARS but can just select the relevant SARS bank account from the pre-populated list of beneficiaries on their internet banking profile.
At a SARS branch
All payments paid directly to a SARS branch must be accompanied either by a copy of the tax return or clearly state the tax reference number, tax period, tax type and PRN.
SARS do not accept any cash payments except for SARS Customs branches where customs and excise can still be paid in cash.
There are a number of limitations on cheque payments at a SARS branch. Please contact your tax adviser for more information if you make use of cheques.
Certain SARS branches will accept payment via credit or debit card only if this is indicated on a notice board.
Over-the-counter deposit at a bank
Over-the-counter payments done at a bank must be accompanied by the correct information otherwise the bank will reject the payment. The information that must be submitted to the bank together with the payment can be found on the relevant SARS tax return.
Cheque deposits exceeding R500 000 will be rejected by the banks. “Split cheque” payments where the full amount due is larger than R500 000 and then split into two or more cheques of which each cheque is below R500 000, will also be rejected by banks.
How to determine a PRN
If a PRN has not been pre-populated on a tax return, a taxpayer can still determine the correct PRN him/herself by manual means by combining the following information in a 19-digit PRN:
- tax reference number
- tax type
- tax period
Tax reference number: 1234 567 89 0 (digits 1 – 10)
Tax type identifier: 7 (digit 11)
Tax period being paid: June 2014 (digits 12 – 19)
The PRN will be 1234567890730062014.
Taxpayers should check that they use the correct PRN to ensure that payments are accurately and timeously processed and allocated to the correct account. It remains the full responsibility of the taxpayer to ensure that payment is received by SARS on time in order to avoid any penalties and/or interest from being charged on late payments.
If you would like more information on the regulations regarding payments to SARS, please contact your tax practitioner.
This article is a general information sheet and should not be used or relied upon as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice. Errors and omissions excepted (E&OE)