Record Keeping: Focusing on the Tax Administration Act

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Record Keeping: Focusing on the Tax Administration Act

• 13 November 2025
• Tax Administration
• Adv Christel van Wyk

The primary legislation governing record-keeping requirements for South African tax compliance purposes is the Tax Administration Act, 28 of 2011 (“the Act”). The Act not only prescribes the manner in which records must be kept but also stipulates how they must be stored, the accessibility standards, retention periods, and the persons responsible for maintaining such records. Failure to comply with these requirements can result in significant penalties — an outcome best avoided.

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Who Must Keep Records?

Section 29 of the Act requires any person submitting a return, and anyone required to submit a return, to keep records. Even where no return is required, this obligation still applies to any person who has received income, incurred capital gains or losses, or engaged in any activity that is subject to tax (or would be, but for an exemption or threshold).

Records must be kept in such a way that the taxpayer can meet all tax obligations and satisfy SARS of their compliance. This is a broad requirement that should be approached with due care and attention.

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Retention Periods

As a general rule, supporting documents must be retained for:

• Five years from the date of submitting a return;
• If a return was not submitted as required, five years from the actual date of submission — increasing the taxpayer’s administrative burden; or
• Where there is no obligation to submit a return, records must be retained for at least five years from the end of the relevant tax period — and potentially longer for capital gains tax purposes.

 

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Extended Retention Periods

Records must be retained for longer in certain circumstances:

• Audits and investigations: If SARS has notified a taxpayer of an audit or investigation, relevant records must be kept until the process is concluded — which may significantly extend the retention period.
• Disputes: Where an assessment is under dispute, supporting documents must be kept until the dispute is finalised and the assessment becomes final.
• Fraud, misrepresentation, or non-disclosure: SARS may reopen an assessment indefinitely in cases involving fraud, misrepresentation, or material non-disclosure. However, SARS bears the burden of proving that a tax liability was not paid as a result of such actions.
• Capital gains: Since the taxpayer bears the burden of proof to substantiate the base cost for capital gains tax purposes, relevant records may need to be retained for several decades.

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Required Record Types and Format

Depending on the nature of the claim, a wide range of records may be required, including:

• Ledgers, cash books, and journals;
• Bank statements and deposit slips;
• Invoices, retail slips, and receipts; and
• Tax certificates.

Records must be retained either in their original form or in an acceptable electronic format. Electronic records must maintain their integrity, be easily accessible, and be available for inspection by SARS. Additionally, electronic records must be stored within South Africa, unless a senior SARS official has granted written authorisation for them to be stored elsewhere — in which case, they must still be accessible from within South Africa.

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Penalties

Non-compliance with the record-keeping requirements may result in both administrative and criminal penalties:

• Administrative penalties: SARS may impose fixed-amount penalties for non-compliance, such as failing to submit a return or provide requested documentation.
• Criminal offences: A taxpayer who fails or neglects to maintain required tax records commits a criminal offence. In such cases, SARS carries the burden of proof beyond reasonable doubt — a higher standard than in civil matters.

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Conclusion

Taxpayers are strongly encouraged to implement a robust document management system to ensure they can promptly respond to SARS requests for supporting documents within the prescribed timeframe (or any extended period agreed upon). A sound record-keeping strategy not only ensures optimal tax compliance but also reduces administrative burdens and minimises the risk of penalties.

If you’d like to learn more about the practical application of these record-keeping requirements, click here to access our video on Record Keeping and the Tax Administration Act.

 

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