How to Deregister Your Company’s Tax with SARS After Closing It 🏢

Executive Summary: Closing a company in South Africa is a two-step process: deregistering at the Companies and Intellectual Property Commission (CIPC) and formally deregistering all tax registrations with SARS. Many business owners incorrectly assume that CIPC’s deregistration automatically ends their SARS obligations. This is not the case: a SARS tax reference number remains active until you notify SARS to deregister it. Failing to deregister or file the necessary final returns leads to ongoing compliance requirements and mounting penalties (monthly fines, interest, VAT/PAYE notices, etc.) even for dormant companies. This guide explains why SARS deregistration is essential, how it interacts with CIPC deregistration, the practical steps and required documents, legal/financial risks of non-deregistration, and when to seek professional help.

🚀 Why You Must Deregister with SARS

When a company is deregistered with CIPC, it ceases to exist legally – no assets, liabilities or legal standing. However, SARS treats the tax registrations independently. The SARS portal will still consider the company active for income tax, VAT, PAYE, etc., unless you formally deregister each tax type. In other words, the SARS tax number remains active after CIPC deregistration. Until you deregister with SARS, the company technically still has tax obligations (even if dormant).

• The SARS “Closing a Business/Company” guide explicitly states that after CIPC confirms deregistration, the taxpayer must “visit their nearest SARS branch and make sure the business or company is deregistered for all the various types of tax.”.
• Administrative guidance emphasizes that SARS deregistration is not automatic. For example, tax consultants note the “widespread misconception” that CIPC deregistration suffices. In reality, a second formal SARS deregistration request is required for each tax category (income tax, VAT, PAYE, etc.), supported by the CIPC deregistration notice.
• SARS itself indicates that failing to deregister keeps the company on its rolls. Until you give notice, SARS may continue issuing compliance demands (returns, notices) to the company’s tax number.

Bottom line: Closing your company on CIPC does not close its tax file. You must proactively deregister at SARS to stop further obligations.

🛠️ Practical Steps to Deregister with SARS

Once your company’s CIPC deregistration is confirmed, follow these key steps to close out your SARS tax accounts. Ensure all steps are completed to avoid penalties:

1. Obtain CIPC Deregistration Proof: Secure the formal Notice of Deregistration or confirmation letter from CIPC. You’ll need this as proof that the company has no assets/liabilities.
2. Bring Tax Compliance Up to Date: Before requesting deregistration, file all outstanding tax returns (even if nil) and settle any tax debts. SARS will not deregister a company with outstanding returns or debts. For dormant companies, this means filing nil returns (Income Tax, VAT, etc.) up to date.
3. Gather Required Documents: Typically you’ll need:
   • Certified IDs of directors/public officers.
   • The CIPC deregistration letter/certificate.
   • A Tax Clearance Certificate or proof of compliance from SARS (showing no outstanding returns/tax debt).
   • A formal request or letter to SARS (see next step).
4. Submit Deregistration Request to SARS: There are a few methods:
   • SARS eFiling (deactivation): Log into the company’s eFiling profile, go to Organisation > SARS Registered Details > Maintain SARS Registered Details, select the tax type (e.g. Income Tax) and choose “Deactivate”. Provide the CIPC notice when prompted.
   • Email or Letter: Send a written request to SARS (e.g. via or the SARS branch), attaching the CIPC deregistration confirmation and any supporting documents. Mention that you want to deregister all tax types.
   • Branch Appointment: Book an eBooking with a SARS branch. Bring the CIPC deregistration notice and IDs. SARS staff will process deregistration requests (per [33] and SARS FAQ).
5. Deregister Each Tax Type: You must do this for every tax registration the company has (Income Tax, VAT, PAYE, etc.). VAT and PAYE can be deregistered once compliant, but they require separate steps.
6. Await Confirmation: SARS will review your application. Once satisfied (returns filed and debts settled), they will issue confirmation of deregistration or update your status to inactive. Keep records of this confirmation for your files.

Note: No single official “deregistration form” exists; it’s usually a request plus documentation. A SARS webinar slide summarizes the process: first deregister with CIPC and get the confirmation, then schedule an appointment or send SARS the proof to begin the tax deregistration steps

⚠️ Legal & Financial Risks of Not Deregistering

Failing to properly close your SARS registrations has serious consequences. The law imposes ongoing obligations and penalties until you either file required returns or formally deregister. Key risks include:

• Monthly Administrative Penalties: SARS charges fixed monthly fines for each missing or late return. For example, small companies can be fined R250–R2,000 per month per outstanding return, scaling up to R4,000–R16,000 for larger businesses. These penalties accrue every month (up to 35 months) until compliance. Even a dormant company must submit zero-amount returns or face these fines.
• Interest Charges: Any unpaid taxes (even small ones) will attract interest at SARS-prescribed rates. Over time, unpaid liabilities balloon with interest, on top of penalties.
• VAT & PAYE Exposure: If the company had VAT or was an employer, failing to cancel these registrations means SARS can audit or issue compliance notices (and penalties) for these as well.
• Negative Tax Status: SARS flags the account as non-compliant. The Sage guide warns that “if you ignore notifications from SARS, it will keep levying … penalties and the company will have a non-compliance tax status.”. A non-compliant status can block the business from future tax registrations and beneficial submissions.
• Debt Collection Actions: Persistent non-payment or non-filing can lead to summons or seizure of assets. SARS may even appoint agents (employers, banks) to recover unpaid admin penalties.
• Criminal Liability for Directors/Officers: Tax practitioners warn that directors or the designated tax representative can be held personally liable for non-filing or unpaid tax debts, potentially even facing criminal charges.
• Business & Reputation Impact: According to SARS compliance experts, an inactive company not properly closed faces compliance flags, which can lead to business name hijacking, difficulty in registering new companies, or problems with banks and tenders.
• Missed A Remission Opportunity: If you later apply for remission (cancellation) of penalties, SARS is more lenient if you proactively explain (especially if the company was dormant). Letting penalties accumulate without action forfeits that chance.

In short, “closing” your company in public registers while still ignoring SARS obligations is like walking away with the stove still on – it will leave a dangerous mess of fines, interest and legal trouble. The safest route is to bring taxes fully up to date and formally deregister, rather than risk escalating costs.

🔄 CIPC Deregistration vs SARS Tax Deregistration (Comparison Table)

Aspect	CIPC Deregistration	SARS Tax Deregistration
What it Does	Cancels the company’s legal registration (it ceases to exist as a company).	Cancels tax registrations (Income Tax, VAT, PAYE, etc.) so no further filing/tax obligations remain.
Covers	Company’s corporate existence only (no assets/liabilities).	The company’s obligations under tax law (returns, payments) are formally ended.
Does It Happen Automatically?	Can happen voluntarily or for non-compliance (e.g. no annual returns), but is a separate process.	No – it requires a formal request to SARS, even after CIPC deregistration.
Trigger	Company is inactive/no assets, or fails annual returns.	Company (even dormant) is no longer active. You apply once CIPC deregistered and returns filed.
Documents Required	Letter to CIPC on company letterhead + proof of inactivity/consent.	CIPC deregistration notice, proof of tax compliance (returns filed), IDs, and a deregistration request (via eFiling/email/branch).
Effect of Completion	Company removed from CIPC register, legally dissolved.	SARS stops issuing returns demands; final confirmation given that tax registrations are cancelled.
Outstanding Liabilities	Must be resolved (assets settled) before CIPC deregistration.	All tax liabilities/returns must be settled before SARS will deregister (no outstanding debt).
Timeframe	CIPC aims to process deregistration in a few months once application is complete.	SARS has no fixed timeline; it can take several months (estimates range ~3–12+ months) for processing.

📑 Required Documents & Timeline

Documents: To deregister your company’s tax accounts with SARS, prepare the following (as indicated by SARS guidance and tax experts):

• CIPC Deregistration Notice: The formal letter or certificate from CIPC confirming the company is deregistered (no assets/liabilities).
• Supporting Letter: A written request on company letterhead (signed by director/public officer) to deregister the tax accounts, referencing the CIPC deregistration.
• Identifications: Certified copies of IDs for all directors or public officers.
• Tax Compliance Certificates: Recent Tax Compliance Status certificate (or proof from eFiling) showing all returns are up to date.
• Proof of Final Returns: Copies or proof of submission of any final Income Tax, VAT, PAYE returns.
• Other supporting docs: Depending on circumstances, SARS may ask for bank statements or proof of asset disposal (if liquidation was involved).

Timeline: SARS does not publish a strict deadline. Industry experience suggests deregistration can take months:

• One tax advisory notes delays of 3–12 months are common.
• Another warns that, if the company lacks an active tax representative, finalisation may stretch 12–18 months.
• Assumption: Since SARS appointment slots and processing time vary, assume “several months” unless they expedite your case. If no timeframes are given, treat deadlines as unspecified.
• Follow-Up: Monitor your case (e.g. via SARS eFiling or allocated case number). If delays are excessive, you can inquire at the SARS branch using your appointment case number.

Ultimately, be patient but persistent. A professional agent or tax practitioner can often track and liaise with SARS to speed up confirmation.

👥 Recommended Professional Help

Handling CIPC and SARS deregistration correctly can be complex. Many businesses enlist professionals to avoid mistakes. Consider these options:

• Tax Practitioners / Accountants: A registered tax practitioner or accountant can ensure all tax returns are lodged, debts settled, and the deregistration request is correctly filed on eFiling or with SARS. They can also file a Request for Remission if needed.
• Corporate Secretarial Firms: Companies like AdminBoss specialize in company compliance. They often package CIPC deregistration and SARS deregistration together for “fast, compliant, stress-free” closure.
• Tax Attorneys (if issues): If your company has significant unresolved tax issues or if criminal or levy notices have been issued, a tax attorney can provide legal privilege and negotiate with SARS.
• Why Hire Help: Experts are “knowledgeable and well-versed in all legislative compliance regulations” for both CIPC and SARS. For example, AdminBoss advertises that professional service ensures correct CIPC deregistration and closure of SARS income tax, VAT, PAYE, and UIF accounts, giving you “peace of mind”.
• When to Seek: If you feel uncertain about forms or risk penalties, or simply want to be sure the process is done right, engaging a specialist prevents oversight. Remember: a small fee for a consultant is likely far less than ongoing SARS penalties or legal trouble later.

❓ Frequently Asked Questions

• Q: If CIPC has deregistered my company, do I still need to tell SARS?
  A: Yes. CIPC and SARS are independent. CIPC’s deregistration only ends the company’s legal existence, not its tax obligations. SARS explicitly notes that tax numbers stay active until you apply to cancel them.
• Q: What happens if I skip SARS deregistration?
  A: The company will remain active on SARS’s system. You’ll still be required to file returns (even nil returns) and could incur heavy monthly penalties and interest for non-filing. If SARS cannot reach you, penalties may continue for up to 35 months.
• Q: How do I notify SARS? Can I do it online?
  A: Yes, one common method is via eFiling: under Organisation > SARS Registered Details, select your tax registration and choose “Deactivate”. Alternatively, you can send a written request by email or bring documents to a SARS branch (appointment recommended). Ensure you include the CIPC deregistration notice.
• Q: Which tax types must I cancel?
  A: Generally all that were active: e.g. Income Tax is primary. If registered for VAT or as an employer (PAYE/UIF), those must be deregistered separately. SARS may allow VAT/PAYE cancellation only once the company is fully compliant, but you should handle each type with a separate request.
• Q: Do I need to submit final tax returns?
  A: Yes. SARS requires all outstanding returns be filed (even if nil) before it will cancel the tax number. This ensures taxes are up to date.
• Q: Can SARS refuse to deregister?
  A: SARS will only deregister once its checks (outstanding returns, debts) are clear. If issues remain, they may withhold final deregistration until resolved.
• Q: How long does SARS take to confirm deregistration?
  A: There is no guaranteed timeline. Some businesses report several months of processing. If you need faster resolution, ensure every requirement is completed so SARS has no reason to delay.
• Q: What if I encounter problems?
  A: If SARS continues to issue penalties or if you’re stuck, contact the SARS Contact Centre or a tax consultant immediately. Also consider submitting a Request for Remission if penalties have begun. The key is to act – ignoring the issue only worsens the situation.

In summary: Don’t assume deregistering with CIPC closes the book on taxes. Actively notify SARS and close out each tax type. This “double deregistration” is crucial to avoid penalties, interest and compliance headaches down the line.