No. CIPC and SARS are separate institutions with separate records, and neither closes the other's registrations. A company deregistered at CIPC keeps its income tax, VAT and PAYE registrations open at SARS, which keep generating return obligations and administrative penalties month after month. This is why companies that go through reinstatement frequently discover a SARS penalty position that built up quietly while they were dealing with CIPC.
Two institutions, two records, no connection between them. Almost every expensive deregistration surprise comes from assuming otherwise.
What actually keeps running
Income tax. The company remains registered and returns remain due. Administrative penalties for outstanding returns recur monthly, and they accumulate against an entity nobody is monitoring.
VAT. If the company was VAT registered, the vendor registration stays open. VAT201 returns keep falling due on the tax period cycle. Nil returns are still returns, and not filing them attracts penalties and interest.
PAYE, UIF and SDL. The employer registration stays open. EMP201 returns keep falling due monthly, and the EMP501 reconciliations twice a year.
None of this stops because the company was deregistered. SARS has no reason to know, and no mechanism that acts on it automatically.
Why it compounds so badly
Nobody is watching. The company is deregistered, the owner has moved on, and correspondence goes to a registered address that is now doubly irrelevant.
Penalties recur. Administrative penalties for outstanding returns are not a single charge. They repeat, monthly, per outstanding return.
Interest runs on unpaid amounts.
The registered representative may no longer exist in the business. Every notice goes to a person who left, and nothing gets actioned. See what is a SARS registered representative.
And it surfaces at the worst time — during reinstatement, when the whole point was to get trading again. The company comes back onto the register owing SARS more than it did when it fell off. See how to reinstate a deregistered company.
Deregistering at SARS is a separate job
VAT deregistration is applied for at SARS. It is not automatic and it has a consequence people miss: deregistering for VAT triggers output VAT on assets still held on which input tax was claimed. Deal with the assets before deregistering, not after. See should you deregister for VAT.
PAYE deregistration is applied for separately, once you genuinely have no employees and the final EMP501 reconciliation is done.
Income tax — the company's registration is dealt with as part of properly closing the entity, with all returns filed and everything settled.
All of it requires a functioning registered representative, which is why that appointment matters even at the end of a company's life.
The correct order when closing a company
This sequence exists precisely because of the problem in this article.
1. Stop trading and settle the business — collect debtors, pay creditors, dispose of assets.
2. Deal with employees properly under the Labour Relations Act and BCEA.
3. File every outstanding return at SARS and settle everything owed.
4. Deregister VAT and PAYE at SARS. ← The step this article exists for.
5. Bring CIPC filings up to date — annual returns and beneficial ownership.
6. Close the bank account.
7. Apply to CIPC to deregister.
8. Keep the records for the retention periods.
SARS comes before CIPC. Do it the other way round and you are trying to deregister tax registrations for a company that no longer legally exists, without a registered representative who can act.
See how to deregister a company voluntarily.
If your company is already deregistered with SARS registrations open
1. Establish the SARS position. Which registrations are open? How many returns are outstanding? What penalties have accrued?
2. Work out whether you need the company back. If it owns assets, has debtors, or you intend to trade again, reinstatement is the route. If not, you still cannot simply ignore the SARS side.
3. Sort the registered representative. Nothing can be done on eFiling without one, and this takes time.
4. File the outstanding returns, oldest first, including nil returns.
5. Request remission of penalties where there are grounds. The reinstatement documents and an honest explanation of the sequence are the supporting evidence. Remission is discretionary and not guaranteed, but the request should be properly made.
6. Then deregister the SARS registrations properly, so this does not continue.
Frequently asked questions
Does CIPC deregistration cancel my VAT registration? No. CIPC and SARS hold separate records and neither closes the other's registrations. A VAT registration stays open after CIPC deregistration and VAT201 returns keep falling due, with penalties and interest for non-submission.
Does deregistering a company at CIPC close its PAYE registration? No. The employer registration remains open at SARS, with EMP201 returns due monthly and EMP501 reconciliations twice a year, until PAYE is separately deregistered at SARS.
Do SARS penalties keep accruing after a company is deregistered? Yes. Administrative penalties for outstanding returns recur monthly per outstanding return, and interest runs on unpaid amounts, regardless of the company's CIPC status.
What order should I deregister a company in? SARS before CIPC. Settle and file everything at SARS, deregister VAT and PAYE there, bring CIPC filings up to date, close the bank account, then apply to CIPC. Doing it the other way round leaves tax registrations open for an entity that no longer exists.
What happens to SARS registrations during reinstatement? They were never closed, so returns and penalties accrued throughout the deregistered period. Many companies complete reinstatement only to find a substantial SARS penalty position that built up while they were dealing with CIPC.
Does deregistering for VAT have a tax cost? It can. VAT deregistration triggers output VAT on assets still held on which input tax was claimed, so the assets should be dealt with before deregistering rather than after.
Can I fix this if my company is already deregistered? Yes, but it takes work. Establish the SARS position, sort out the registered representative, file the outstanding returns oldest first, request remission of penalties where there are grounds, and then deregister the SARS registrations properly.
Two institutions, two jobs
The assumption that closing a company at CIPC closes it everywhere is the single most expensive misunderstanding in company deregistration. It runs quietly for years and lands as a penalty assessment.
Smartbook handles deregistration in the right order — SARS registrations closed first, then CIPC — and deals with the accrued penalty position where a company has already fallen off the register.
Reinstate a deregistered company →
Last reviewed: 1 August 2026. Written by the Smartbook team — SAIPA and SAICA accredited, SARS registered tax practitioners. SARS deregistration processes, penalty remission and the VAT exit charge depend on the specific facts — take advice on your position. General guidance, not advice on your circumstances.
Primary sources: SARS · CIPC · Tax Administration Act 28 of 2011 · Value-Added Tax Act 89 of 1991