What is reviewed in a SARS debt compromise application?
A compromise asks SARS to accept a lesser amount in full settlement of a debt you accept you owe. Whether it is suitable - and whether SARS might accept - depends on a set of decision factors that this guide walks through as a preparation framework. It is not an automated eligibility score; the factors require current statutory review and SARS holds the decision. Use it to understand what is assessed, not to predict an outcome.
Suitability depends on documented facts, not a score
A compromise is assessed on financial position, the accuracy of the information, the evidence funding any offer, and compliance status. It is discretionary - SARS decides whether to accept - and several situations make it unsuitable before those factors are even reached. This guide prepares you for what is reviewed; it does not predict eligibility.
Who may be considered
Both individuals and entities can be assessed for a compromise. The review differs in scope - personal versus business finances - but the principle is the same: full disclosure of a genuine inability to pay the full debt.
Individuals
A natural person with a personal tax debt may be assessed for a compromise. The review considers personal income, assets, liabilities and household expenses.
Businesses
A company, close corporation or other entity with a tax debt may also be assessed. The review extends to the entity's financial position, and director authority to engage is required.
Four decision factors assessed
These are the factors a compromise application is built around. They are a preparation framework, not an automated scoring tool - each requires current statutory review and SARS holds the final decision.
Financial position
Assets, liabilities, income and expenses are reviewed to establish whether paying the full debt is genuinely impossible - not merely inconvenient. Full disclosure is the foundation; gaps weaken rather than help the request.
Accuracy of information
The information provided must be accurate and verifiable. Incomplete or inconsistent disclosure can undermine the application and is treated seriously. The review checks that figures reconcile across documents.
Offer-funding evidence
Where a reduced offer is proposed, the source of funds for the offer amount must be evidenced. SARS considers whether the offer is funded and realistic, not merely a figure plucked from the air.
Compliance status
Current and ongoing compliance is relevant. Outstanding returns and unresolved disputes can affect whether a compromise is the right route or whether other steps should come first.
Four situations that point elsewhere
A compromise is not always the right route. These four situations suggest a different step should come first - and pursuing a compromise in spite of them can waste effort or accept a debt that should be disputed.
The debt is disputed
A compromise settles a debt you accept. If you disagree with the amount, correcting or objecting to the assessment comes first - a compromise would accept a figure you believe is wrong.
You can pay in full over time
If the constraint is cashflow rather than inability, a payment plan - paying the full amount in instalments - is typically the more appropriate route. A compromise is for genuine inability.
Returns are outstanding
Unfiled returns can prevent a meaningful compromise, because the debt figure may be based on estimates. Bringing filings up to date may need to happen first so the true position is known.
Disclosure is incomplete
A compromise rests on full, accurate disclosure. If the evidence cannot be assembled or reconciled, the application is weakened and may not be worth pursuing until the position is clear.
SARS decides - approval is discretionary
A compromise application is a request, not a determination. SARS reviews the disclosed position and decides whether to accept a reduced amount. Approval is never guaranteed, and no practitioner can promise an outcome before SARS has decided.
What this means: preparing a strong application is about accurate, complete disclosure that reflects a genuine inability to pay - not about arguing for the lowest figure. The documents guide lists what to gather, and the compromise vs payment plan guide helps confirm a compromise is the right route before you prepare one.
What is and is not promised
What this guide provides
- A preparation framework for the factors a compromise is assessed on.
- Clarity on who may be considered and what could make it unsuitable.
- Pointers to the documents and comparison guides that complete the picture.
What is not promised
- Automated eligibility scoring. Suitability is a professional judgement, not a calculation.
- A prediction that SARS will accept. The decision is discretionary.
- A determination of which route applies to your specific facts.
Questions about compromise eligibility
Can businesses and individuals be assessed?
Yes. Both natural persons and entities such as companies can be assessed for a compromise. The review differs in scope - personal income and household expenses for an individual, business financials and director authority for an entity - but the principle is the same: full disclosure of a genuine inability to pay the full debt. The assessment confirms which applies to your situation.
What could make an application unsuitable?
Four common situations: the debt is disputed (a compromise accepts the figure, so a dispute should come first); you can pay in full over time (a payment plan is more appropriate); returns are outstanding (the debt may be based on estimates); or disclosure cannot be assembled or reconciled. In each, a different step should come before a compromise is pursued.
Who makes the decision?
SARS. A compromise application is a request for SARS to accept a lesser amount, and SARS decides whether to do so based on the disclosed position. Approval is discretionary and never guaranteed, regardless of how strong the application appears. No practitioner can promise an outcome before SARS has decided. The compromise service page explains what the engagement involves.
Confirm whether a compromise suits your facts
A confidential assessment reviews your financial position against the decision factors and confirms whether a compromise is the right route or another step should come first. No outcome is promised. No documents or passwords are required to begin.