Alas, sometimes you can’t appeal

Author: Louis Botha (Cliffe Dekker). A certain question has been the subject of a number of recent court cases: Is an interim order or a decision which does not dispose finally of a case appealable? The Constitutional Court recently had to answer this question in two separate cases – one involving the changing of street names in Tshwane and the other involving the provisions of the National Credit Act, No 34 of 2005. The issue has now also reared its head within a tax context in the Supreme Court of Appeal (SCA). In Wingate-Pearse v CSARS (830/2015) [2016] ZASCA 109 (1 September 2016), a taxpayer wanted to appeal, among other things, the Tax Court’s decision regarding the onus of proof and the duty to commence leading evidence.

“Exceptional circumstances” when objecting to an assessment

Author: Keelen Snyders, BDO South Africa. A recent tax case highlighted the importance of taxpayers gaining an understanding of the objection process for income tax assessments issued by SARS. The case, which was contested between ABC (Pty) Ltd and the Commissioner, was concerned with the onus on the taxpayer to prove “exceptional circumstances” when objecting to an assessment issued by SARS. In terms of the Tax Administration Act (TAA), a taxpayer may object to an income tax assessment within 30 business days of the date of the assessment. If a taxpayer wishes to object after expiry of this period, a senior SARS official may extend the period by 21 business days provided SARS is satisfied that “reasonable grounds” exist for late submission.

Tax Administration – Correction of errors in assessments

The Tax Administration Laws Amendment Act of 2015, which was promulgated on 8 January 2016, amended section 93(1)(d) of the TAA and  in future SARS will not be permitted to entertain so-called ‘requests for correction’ of tax assessments, except if SARS is satisfied that there is a (currently undefined) ‘readily apparent’ undisputed error in the assessment. It is likely that taxpayers will be severely discriminated against by this amendment. What is ‘readily apparent’ to one person may not be so to another. The number of cases in which SARS is likely to grant requests for corrections is likely to drop dramatically and a lack of consistency in interpretation between SARS’ assessors may be taken as a given.

An uncompromising stance – the dispute between SARS and Julius Malema continues

The High Court (Gauteng Division, Pretoria) recently handed down judgment in the case of Malema v Commissioner for the South African Revenue Service (76306/2015) [2016] ZAGPPHC 263 (29 April 2016).  The issue before the court was whether the South African Revenue Service (SARS) was bound to a compromise agreement entered into between the Malema (Applicant) and SARS as a result of alleged non-disclosures and misstatements made by the Applicant, who expressly warranted the truth of the facts furnished by him. The compromise agreement was concluded in accordance with the provisions of s205 of the Tax Administration Act, No 28 of 2011 (TAA).

Extension of the period to submit an objection: what constitutes exceptional circumstances?

Author: Chris de Bruyn(Candidate attorney at ENSAfrica). In the matter of ABC (Pty) Ltd v Commissioner for the South African Revenue Service (ITC 0038/2015) (“ABC case”), the Tax Court had to consider whether the taxpayer discharged the onus to prove that “exceptional circumstances” existed for an extension of the period allowed for the taxpayer to object to an assessment, in terms of section 104 of the Tax Administration Act, 28 of 2011 (“TAA”).

Section 104 of the Tax Administration Act and the meaning of ‘exceptional circumstances’ – a cautionary tale

Author: Heinrich Louw (Senior Associate). In terms of s104 of the Tax Administration Act, No 28 of 2011 (Act), a taxpayer who is aggrieved by an assessment or decision of the South African Revenue Service (SARS), may object to the assessment or decision. The Act states that the objection must be lodged within 30 business days from the date of the assessment. A senior SARS official may extend this period by no more than 21 business days, unless the official “…is satisfied that exceptional circumstances exist which gave rise to the delay in lodging the objection”.

The Kluh-ed up taxpayer wins – a decision on section 26 of the Income Tax Act

In its efforts to increase its income from tax revenue, the South African Revenue Service (SARS) sometimes applies legislative provisions in tax legislation in a manner that can best be described as tenuous. An example of this is apparent from the recent decision of the Supreme Court of Appeal (SCA) in CSARS v Kluh Investments (Pty) Ltd (115/2015) [2016] ZASCA 5 (1 March 2016).

SARS’s investigative powers – a possible backstage pass to matters pending before court?

Author: Yashika Govind (Associate at CLiffe Dekker Hofmeyr). Chapter 5 of the Tax Administration Act, No 28 of 2011 (TAA) confers a broad range of information-gathering powers on the South African Revenue Service (SARS). Taxpayers are often assessed for more than one tax period at a time, however, the waters become muddied when there are parallel processes carried on in which the issues being investigated by SARS, overlap with disputes pending before the Tax Court. The taxpayer is then saddled with defending itself in respect of a tax period before court while simultaneously sourcing and providing relevant material pertaining to the same legal issues for an audit of a later tax period. In these circumstances, there is often an overlap of facts, law and witnesses which will ultimately be presented in court, thus rendering the information gathering process questionable.

SARS introduces electronic ‘suspension of payment’ applications

Taxpayers lodging a dispute with SARS can now electronically request that SARS suspend the payment of tax. However, please be aware that the suspension of payment should be requested at a branch if it is accompanying an objection or appeal. It must not be done via eFiling as eFiling only supports “suspension of payments” that do not accompany an objection or appeal. What if I don’t agree? What’s New? From 4 December 2015 for Income Tax, taxpayers will be able to electronically at a SARS branch and via eFiling:

Corrections of tax assessments – what is readily apparent to SARS?

Author: David Warneke Director and Head of Tax Technical at BDO South Africa. The latest version of the Tax Administration Laws Amendment Bill of 2015, which is likely to be promulgated in its current form, proposes that in future SARS will not be permitted to entertain so-called ‘requests for correction’ of tax assessments, except if SARS is satisfied that there is a (currently undefined) ‘readily apparent’ undisputed error in the assessment. In my view, it is likely that taxpayers will be severely prejudiced by this amendment. What is ‘readily apparent’ to one person may not be so to another. The number of cases in which SARS is likely to grant requests for corrections is likely to drop dramatically and a lack of consistency in interpretation between SARS’ assessors may be taken as a given.