For tax purposes, keep your business records for at least five years from the date you submit the tax return they relate to. Under the Companies Act, a company must keep its accounting records for seven years. In practice, most companies keep everything for seven years, and longer if SARS is auditing them or they've lodged an objection or appeal.

The two main rules

1. SARS: five years (Tax Administration Act, section 29)

You must keep the records that support any tax return for five years from the date the return was submitted. If no return was required, the five years run from the end of the relevant tax period.

This covers income tax, VAT, PAYE and other taxes administered by SARS.

2. Companies Act: seven years (section 24)

Companies must keep their accounting records and other company records for at least seven years. Because this is longer than the SARS period, seven years is the safe rule for any company.

When you must keep records for longer

  • SARS audit or investigation. Keep everything relevant until the audit or investigation is finished, even if the five years have passed.

  • Objection or appeal. Keep the records until the dispute is finally resolved.

  • Assets you still own. Keep the purchase documents for property, vehicles, equipment and shares for as long as you own them, plus five years after you sell them. You'll need them to calculate capital gains tax and wear-and-tear.

  • Company founding documents. Keep your registration certificate, MOI, share certificates, securities register and minutes of meetings permanently.

What records you need to keep

Accounting and tax records:

  • Sales invoices and credit notes you've issued

  • Supplier invoices, receipts and tax invoices for everything you claim

  • Bank statements for every business account

  • Your general ledger, trial balances and annual financial statements

  • Tax returns, assessments and supporting calculations

  • VAT201 returns and supporting schedules

  • Asset registers and depreciation schedules

  • Contracts, leases and loan agreements

  • Logbooks for business travel

Payroll records:

  • Payslips, payroll reports and employment contracts

  • EMP201 and EMP501 submissions and IRP5/IT3(a) certificates

  • UIF and COIDA declarations

Company secretarial records:

  • MOI, registration documents and any amendments

  • Securities register and share certificates

  • Directors' and shareholders' resolutions and minutes

  • Beneficial ownership records

Can I keep records electronically?

Yes. Electronic records are acceptable if they're complete, readable and can be produced when SARS asks for them. That includes scanned paper documents and records in cloud accounting software.

Good practice:

  • Scan paper receipts promptly. Thermal till slips fade within months.

  • Keep a backup in a second location.

  • If you change accounting software, export and keep your old data before you close the old system.

  • Make sure you can still access records if you stop using a service.

What happens if you don't keep records

  • SARS can estimate your income and issue an assessment you'll struggle to dispute.

  • Deductions and input VAT can be disallowed if you can't produce the invoices.

  • Penalties can apply for failing to keep records.

  • Banks, buyers and investors will discount a business that can't produce clean historic records.

A simple system for small businesses

  1. Use one separate business bank account. Read why mixing business and personal money causes problems.

  2. Use cloud accounting software and attach the invoice or receipt to every transaction.

  3. Reconcile your bank every month instead of once a year.

  4. Keep a folder per financial year (tax returns, AFS, VAT returns, payroll) and don't delete anything younger than seven years.

Frequently asked questions

How long must I keep records for SARS? Five years from the date you submitted the return they relate to, or five years from the end of the tax period if no return was required. Longer if you're under audit or have an objection or appeal open.

How long must a company keep accounting records? At least seven years under the Companies Act.

Can I throw away paper receipts after scanning them? Generally yes, as long as the scanned copies are complete, readable and backed up, and you can produce them when SARS asks.

What if SARS audits a year that's older than five years? If the audit started before the five years ran out, you must keep the records until it's finished.

Do sole proprietors also have to keep records? Yes. The five-year SARS rule applies to everyone who submits tax returns, including sole proprietors and individuals.