Author: Beric Croome Under the provisions of the Tax Administration Act, the Commissioner: South African Revenue Service (‘SARS’) is entitled to request that a taxpayer submits relevant material that SARS requires in terms of section 46 of the Tax Administration Act No. 28 of 2011 (‘TAA’). Section 1 of the TAA in turn defines ‘relevant material’ as meaning:
Category: Objections & Appeals
Request for "relevant material" by SARS
The South African Revenue Service (SARS) has extensive powers in terms of the Tax Administration Act No. 28 of 2011 (the TAA). In terms of section 46(1) of the TAA, SARS may, for the purposes of the administration of a tax Act in relation to a taxpayer, require such taxpayer or another person (third party) to submit relevant material that SARS requires within a reasonable period. SARS may require such relevant material to be submitted orally or in writing.
Liquidation applications on a disputed tax debt and the applicability of section 177(3) of the Tax Administration Act 28 of 2011
Judge Andre van Niekerk handed down an interesting judgment in the High Court of South Africa (North Gauteng Division) on 30 September 2013. In my respectful opinion the judgment is insightful and is correct. The facts are fairly simple. Miles Plant Hire (Pty) Ltd (MPH) had a tax liability of R37 441 090.59 to the commissioner of the South African Revenue Services (SARS). SARS had levied a tax assessment in this amount on MPH, which included penalties and interest. When MPH failed to pay the assessment, SARS brought a liquidation application against it, which was opposed on two grounds.
Litigation with SARS – levelling the playing field
New rules governing the procedures to be followed in respect of objections and appeals, which are now prescribed in terms of section 103 of the Tax Administration Act, were published in the Government Gazette on 11 July 2014. One of the frustrations experienced by taxpayers involved in litigation with SARS is the fact that SARS frequently fails to deliver documents or decisions within the time limits prescribed in the rules governing the conduct of disputes.
Supreme Court considers administrative fairness in tax disputes
On June 12 2014 an interesting judgment was handed down in the Supreme Court of Appeal (SCA) in Commissioner for the South African Revenue Service v Pretoria East Motors (Pty) Ltd (291/12) [2014] ZASCA 91. Facts The taxpayer operated a car dealership in Pretoria. The South African Revenue Service (SARS) conducted an audit of the taxpayer in respect of its 2000 to 2004 years of assessments, and raised various additional assessments in respect of income and value added tax (VAT), among other things. SARS also imposed punitive additional tax of 200%. The taxpayer objected to the additional assessments, but SARS disallowed the objection. The taxpayer appealed to the Tax Court.
SARS tax audits, the Tax Administration Act and making an effort to understand the taxpayer’s business operations
The recent decision of the Supreme Court of Appeal (“SCA”) in the matter of SARS v Pretoria East Motors (Pty) Ltd (291/12) [2014] ZASCA 91 is important insofar as it deals with SARS’s obligations when conducting a tax audit. (The SCA judgment by Ponnan JA was delivered on 12 June 2014).
SARS must not bully audited taxpayers
Authors: Andrew Wellsted and Rivalani Mutshinya (NortonRoseFulbright) A recent appeal case South African Revenue Service v Pretoria East Motors (Pty) Ltd, sets out the standard that SARS is expected to uphold when auditing taxpayers. SARS must try to understand the systems used by taxpayers before raising additional assessments and imposing penalties for incorrect tax treatment. The court criticised SARS for employing bullying tactics when dealing with taxpayers.
Should the South African Revenue Service adopt a Taxpayer Bill of Rights?
Author: Beric John Croome A Taxpayers’ Charter setting out the rights and obligations of taxpayers in South Africa was published for the first time during 1997. That Charter contained a statement of intent insofar as taxpayers’ rights in South Africa is concerned. On 19 October 2005 the SARS Client Service Charter was released setting out the levels of service that taxpayers could expect in their dealings with the South African Revenue Service (‘SARS’). Currently, neither the Taxpayers’ Charter nor the SARS’ Service Charter Standards can be located on the SARS website and it would appear to be a matter of ‘out of sight out of mind’.
Pay now argue later
Possession, as they say, is nine tenths of the law. Generally in commercial litigation where, for example, a claim for an outstanding amount is brought against a party, such party is not required to make payment to the claimant until a court has adjudicated on the matter. However, when it comes to matters of tax, the Tax Administration Act, No. 28 of 2011 (‘TAA’) requires taxpayers to first make payment to SARS on assessment and then to pursue their various remedies against SARS.
New tax dispute resolution rules brings about some welcome and unwelcome changes
Author: TaxTalk The wait is finally over! After three draft documents for public comment, numerous workshops and internal discussions, the new Dispute Resolution Rules (‘the new Rules’) issued in terms of section 103 of the Tax Administration Act (No. 28 of 2011) (‘the TAA’) has today been promulgated into law under Government Notice 550 published in Government Gazette No. 37819. It should be noted that the new Rules replace the Rules issued in terms of section 107A of the Income Tax Act (‘the old Rules’) with immediate effect. Although the new Rules are a lot more comprehensive than the old Rules, the South African Institute of Tax Professionals’ (‘the SAIT’) technical department warns the public of some common pitfalls and welcome changes.