On 18 February 2014 the North Gauteng High Court delivered a judgment on the remedies available when a tax clearance certificate (‘TCC’) is declined by SARS. What is clear from the judgment is that when a taxpayer is dependent on a TCC for financial or business purposes and it gets declined by SARS, the potential impending economic harm that may come to a taxpayer from such refusal does not entitle the taxpayer to a court order compelling SARS to issue such a TCC sought.
Category: Tax Administration
Tax Prescription – when does it apply?
Authors: Peter Dachs and Bernard Du Plessis of ENSafrica Many taxpayers are generally aware that there is a prescription provision contained in our tax law. However it is not always understood that the prescription provisions apply only if certain statutory requirements are met. In this regard it is not uncommon for SARS to assess taxpayers beyond the prescription period of three years. It is therefore necessary for taxpayers to understand the circumstances in which prescription will apply and also the relevant statutory provisions dealing with prescription.
Tax Adminstration – Grounds on which an assessment can be withdrawn
If a taxpayer is unable to pay a tax debt, Chapter 14 of the Tax Administration Act No. 28 of 2011 (the TAA) makes provision for the taxpayer to apply to the South African Revenue Service (SARS) for the debt to be written off or compromised, that is to say, partially written off. However, SARS is in the business of collecting tax, not of waiving the payment of tax. It will only write off a tax debt if it is in its own interests to do so, for example because it would be impossible or uneconomic to collect the debt. The fact that the taxpayer would suffer hardship if he had to pay the tax debt is irrelevant in this regard, and is not a factor that SARS takes into consideration.
How Sars could single you out for an audit
Author: Ingé Lamprecht (Moneyweb) Sars mum on selection process, but there may be ‘red flags’. JOHANNESBURG – There has been considerable speculation as to exactly how the South African Revenue Service (Sars) chooses individual taxpayers for audit. While some taxpayers have assumed that refunds would trigger an audit, or that a different pool of surnames is chosen each year, the revenue authority does not disclose “red flags” for an audit.
The extensive powers of SARS in requesting “relevant material”
Authors: Gary Vogelman and Alexa Muller (ENS) 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 (“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.
BINDING RULING – COMMERCIAL BUILDING ALLOWANCE
1. Summary This ruling deals with the deduction of a commercial building allowance in respect of a unit, as contemplated in the Sectional Titles Act No. 95 of 1986 (the ST Act). 2. Relevant tax laws This is a binding private ruling issued in accordance with section 78(1) and published in accordance with section 87(2) of the Tax Administration Act No. 28 of 2011.
Beware: You can be held liable for a company’s tax debts
Author: Erich Bell (SAIT Technical Advisor) Generally an individual may choose to run his business in the form of a company or close corporation for various commercial and other reasons. On the one hand it may be to ensure the continuity of the business should a key person pass on, or on the other hand to prevent personal liability in the event that business liquidate. There is a general perception that business owners think that their business (company) is totally separate from them – which in a legal sense is correct – and that
The extensive powers of SARS in requesting “relevant material”
Author: Gary Vogelman and Alexa Muller of ENSafricaThe 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 (“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.
Withdrawal of assessments under the Tax Administration Act
Section 98 of the Tax Administration Act (28/2011) provides for the withdrawal of an assessment by the South African Revenue Service (SARS) in certain circumstances. Before its amendment, Section 98 allowed for the withdrawal of an assessment – despite no appeal having been noted or objection lodged – that was issued: to the incorrect taxpayer; in respect of the incorrect tax period; or as a result of an incorrect payment allocation.
Tax Dispute Resolution
Authors: Peter Dachs and Bernard Du Plessis (ENSafrica) Times have certainly changed. Ten years ago a tax query from a SARS assessor would find its way to the desk of the financial director or in-house tax advisor who would send it off to their auditors. The auditors would, in turn, give it to their tax department who would draft a reply to SARS and hope the matter went away. If not, an informal meeting between the financial director and tax advisor at the audit firm would usually settle the dispute.