Tax clearance certificates (TCCs) are issued by the South African Revenue Service (SARS) to, inter alia, validate the status of a taxpayer and confirm that such taxpayer’s tax affairs are in order. TCCs are, almost without exception, required for tender or bid applications, to reflect good standing, foreign investment and for emigration purposes. A TCC is only valid for one year from the date of issue in respect of a tender and/or good standing, provided the taxpayer remains compliant with SARS requirements.
Category: Tax Administration
Tax Administration – Interpreting statutory provisions
SARS has investigated, and in many cases raised assessments in respect of, share incentive schemes where the employee had accepted an offer to purchase shares at a fixed price prior to 26 October 2004, subject to delivery and payment taking place at a future date. The law relating to these schemes (known as deferred delivery schemes or DDS schemes) was amended with effect from that date. The Supreme Court of Appeal has now delivered its judgment in the matter of C: SARS v Bosch [2014] ZASCA 171 (19 November 2014) and provided clear guidance on the application of the Income Tax Act No. 58 of 1962 (the Act) in relation to deferred delivery share incentive schemes, where the employee had exercised the right to acquire the shares prior to 26 October 2004.
Suspension of payment of tax due
When the Tax Administration Act No. 28 of 2011 (TAA) was promulgated on 1 October 2012 it introduced rather aggressive provisions empowering the South African Revenue Service (SARS) to collect tax more effectively, including the retention of the pay-now-argue-later principle. However, section 164 of the TAA allows a taxpayer to request a suspension of the obligation to pay an amount of tax or a portion thereof under an assessment where the taxpayer disputes or intends to dispute the liability to pay that tax under the dispute resolution provisions contained in Chapter 9 of the TAA. Previously, section 164(3) of the TAA provided that a senior SARS official may suspend payment of the disputed tax or a portion thereof, having regard to:
SARS denies ‘bullying, abuse of powers’
Authors: Natasha Marrian and Carol Paton (BDlive) The South African Revenue Service (SARS) has denied threatening former commissioner Pravin Gordhan with sequestration to recover money lost to the fiscus after his extension of former deputy commissioner Ivan Pillay’s contract. Mr Pillay has since resigned. The existence of the letter was reported in the City Press on Sunday. The newspaper claimed to have copies of correspondence between legal counsel for SARS, commissioner Tom Moyane and Mr Gordhan.
'Rogue' Sars unit spied for Zuma
Author: Sam Sole (Mail & Guardian) A new twist in the ongoing saga of spy vs spy in the South African Revenue Service can now be revealed. The controversial South African Revenue Services (Sars) intelligence unit, which was recently disbanded following headlines that “Sars bugged Zuma”, in fact spied for Zuma. The unit was shut down by new Sars commissioner Tom Moyane in December last year after the report of the Sikhakhane panel of inquiry, which accused the alleged “rogue” unit of illegal intelligence gathering.
‘Rogue’ Sars unit spied for Zuma
Author: Sam Sole (Mail & Guardian) A new twist in the ongoing saga of spy vs spy in the South African Revenue Service can now be revealed. The controversial South African Revenue Services (Sars) intelligence unit, which was recently disbanded following headlines that “Sars bugged Zuma”, in fact spied for Zuma. The unit was shut down by new Sars commissioner Tom Moyane in December last year after the report of the Sikhakhane panel of inquiry, which accused the alleged “rogue” unit of illegal intelligence gathering.
Who is obliged to report a reportable arrangement?
The list of reportable arrangements was extended by the South African Revenue Service in a notice (SARS Notice) published on 16 March 2015 in terms of s35(2) and s36(4) of the Tax Administration Act, No 28 of 2011 (TAA). The SARS Notice has caused some consternation. However, if one considers the obligation to notify SARS of reportable arrangements, the effect of the SARS Notice is perhaps not as far-reaching as first appears.
A preservation order is not of itself a ‘tax collection’ measure
A preservation order is not of itself a ‘tax collection’ measure – but it may well be followed by tax collection processes On 1 December 2014 the Pretoria High Court confirmed a provisional preservation order that had been granted in terms of section 163 of the Tax Administration Act 28 of 2011 against Africa Cash and Carry (Pty) Ltd and various members of the Hathurani family in their personal capacities and in their representative capacities as trustees of trusts. (The judgment – thus far published only on the SARS website – is reported as Commissioner for the South African Revenue Services, as applicant, and 19 respondents, including trustees of the Edrees Hathurani Family Trust; case 49274/2014.)
Challenge to SARS under the Promotion of Administrative Justice Act
Author: PwC South Africa In this issue we have focused on the SARS tactic of challenging the forum to which a taxpayer brings a dispute with SARS. These challenges illustrate that the selection of the procedure to be followed in a dispute with SARS may be critical to success. In the matter of Ackermans Ltd v Commissioner for the South African Revenue Service Case No 16408/2013 in the North Gauteng High Court, the taxpayer had elected to bring an application for a review of the actions of SARS as unconstitutional in terms of section 6 of PAJA. It should be mentioned that the taxpayer had also, on the merits of the dispute, noted an objection and appealed to the Tax Court against the disallowance of that objection.
When may SARS challenge the jurisdiction of the Tax Court?
Our tax cases contain a few instances in which SARS, or its predecessor, Inland Revenue, has sought to avert an anticipated unfavourable judgment by challenging the procedure under which the dispute has been raised. The most recent attempt was in the matter of ABC (Pty) Ltd v Commissioner for the South African Revenue Service [2015] ZAWCHC 8 (judgment delivered on 6 February 2015) (‘the ABC Case’). The recent challenge is perplexing, as SARS had readily entertained an objection against the assessments in question and had contested the appeal in the Tax Court, and had not at any stage of those proceedings suggested that the decision in question was not subject to objection and appeal.