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PIT Insolvency

Changes applicable to insolvent taxpayers (individuals) and their insolvent estates

In line with SARS’ strategic objectives, increased tax compliance and the increased ease and fairness of doing business with SARS and to comply with legislative requirement, changes to the current processes are required in terms of registration, maintenance, and the management of the status of an insolvent individual and estate.

From 25 January 2019, individual taxpayers that are voluntarily or mandatorily sequestrated must submit income tax returns in the following manner:   
  • Insolvent individual – the tax reference number that was used before sequestration will be closed and can no longer be used going forward.  Any income tax returns that are outstanding before the date of sequestration must be submitted using the income tax reference number used before you were declared insolvent.
  • Insolvent estate – the trustee of an insolvent estate must apply for a tax reference number for the insolvent estate.  The new tax reference number will then be used for any interactions with SARS from the date of sequestration until the end of the last day, of that year of assessment.  This second tax reference number is not compulsory, and is only applicable where the whole or part of any business undertaking of the insolvent person is transferred to the trustee of the insolvent estate.
  • Individual post insolvency – you must apply for a new income tax reference number once you have been declared insolvent in order to interact with SARS in respect of tax you may be liable for and returns you need to submit.  

Need help?

For any queries, please contact the SARS Contact Centre on 0800 00 7277

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