Author: Caroline Rogers (Tax ENSight) The Tax Administration Act 28 of 2011 (“Tax Administration Act”) came into effect on 1 October 2012 (save for certain provisions that are still to come into force). This important piece of legislation seeks to incorporate into one Act all those administrative provisions (except for customs and excise) that are generic to all tax Acts and that were previously duplicated across all the different tax Acts.
Category: Tax Administration
Single registration: will it reorganise the disorganised?
Author: Beric Croome and Nada Kakaza (ENSAfrica) The South African Revenue Service (“SARS”) introduced a new streamlined process primarily geared towards the single registration of a taxpayer across applicable tax types. This system was implemented on 12 May 2014.
SARS to Widen List of ‘Reportable Arrangements'
If SARS has its way, the current list of arrangements deemed reportable to SARS in terms of section 35(2) of the Tax Administration Act will be widened considerably. This is apparent from the release on 10th June of a Draft Public Notice (‘the Notice’) listing arrangements that would be deemed to be reportable in terms of the above provision. The Notice has been released for a second round of public comments.
Does the in duplum rule limit interest payable on a tax debt?
The in duplum rule is a South African common law rule which originated in Roman law and provides that interest on a loan or debt will cease to run when the amount of outstanding interest reaches the amount of the outstanding capital. The in duplum rule is based on public policy and protects debtors who are in financial difficulty and are unable to service their debts from an ever-increasing accumulation of interest1.
Preservation orders and the Tax Administration Act
Prior to the enactment of the Tax Administration Act No. 28 of 2011 (“TAA”), the Commissioner: South African Revenue Service (“Commissioner”) was required to apply for a preservation order under the common law, as the Income Tax Act did not itself contain a mechanism whereby the Commissioner could apply for a preservation order under the fiscal statutes to ensure the preservation of assets where there was a concern that a taxpayer may dissipate assets and frustrate SARS’ attempts to recover the tax due.
Where is tax dispute resolution and controversy heading?
Author: Johan van der Walt (KPMG) The tax world has changed globally (mainly OECD and G20 driven), in Africa (especially through African Tax Administration Forum initiatives) as well as locally (SARS becoming a world-class revenue authority with substantial technology and resource investment). Sharon Katz-Perlman, KPMG’s Head of Global Tax Dispute Resolution and Controversy recently observed: “Around the world, levels of tax disputes have reached record heights, and the rise in tax controversy shows no signs of abating.”
Tax Administration Act – Applications to rescind a "judgment"
The judgment reported as Kadodia v CSARS [2013] 75 SATC 313 is a decision of the KwaZulu-Natal High Court in which the applicant taxpayer unsuccessfully applied to court for rescission of a “default judgement” granted against him in terms of section 114(1)(a)(ii) of the Customs and Excise Act, No. 91 of 1964 (the Customs and Excise Act). The judgment was in respect of an alleged underpayment of customs duty and value-added tax amounting to R171 731.
Tax Administration Act – Search and seizure requirements
In an unreported decision, Jen-Chih Huang and 13 others v Commissioner of SARS and others with case number: SARS 4/2013 and dated 18 November 2013 (the Unreported Judgment), Tuchten J of the North Gauteng High Court handed down an important judgment in relation to information and documentation obtained by the South African Revenue Service (SARS) in terms of Part D of the Tax Administration Act No. 28 of 2011 (the TAA).
The liability of shareholders for the tax debts of a company
Dr Beric Croome and Warren Radloff of ENSafrica It has a long been a principle of company law that the debts of a company are not the debts of its shareholders. It may be a surprise to some that this principle does not apply to certain tax debts thanks to section 181 of the Tax Administration Act No.28 of 2011 (“section 181”). This section allows shareholders to be held jointly or individually liable for the tax debts of their company. At first glance it seems unfair to punish those who do not manage the day-to-day running of a company. The Fiscus has indicated that its intention is not to punish shareholders, but to discourage them from asset or dividend stripping the company. This article will consider the application of section 181, namely in what circumstances will a shareholder be held liable for the debts of a company?
Full statement – Julius Malema on Sars deal
“I can confirm that I was informed by SARS today that it has accepted an offer of compromise I submitted in respect of my outstanding tax. This followed my making such an offer to SARS as provided for in the Tax Administration Act. I was informed that a governance committee considered my submission and found it to have complied with the requirements for such an offer.