An interesting judgment was handed down in the Supreme Court of Appeal (SCA) on 12 June 2014 in the matter of Commissioner for the South African Revenue Service v Pretoria East Motors (Pty) Ltd (291/12) [2014] ZASCA 91. The taxpayer operated a car dealership in Pretoria. The South African Revenue Service (SARS) conducted an audit on the taxpayer in respect of its 2000 to 2004 years of assessments, and as a result raised various additional assessments in respect of, inter alia, income and value-added tax (VAT).
Category: Tax Returns
Tax fraudsters sentenced
The scheme was discovered after seven years when Sars became suspicious because so many taxpayers used the same addresses. One of the most complex tax fraud trials the SA Revenue Service (Sars) ever had to deal was concluded on Monday, when the leaders of a crime syndicate were sentenced to between 20 and 15 years’ imprisonment.
Forum shopping – who decides on legal status of assessments?
The Tax Court is a specialist court equipped to adjudicate on tax-related matters pertaining to the legality and correctness of disputed assessments. Sections 104 to 107 of the Tax Administration Act(1) together with the rules of the Tax Court, prescribe the procedures to be followed where a tax assessment is disputed and essentially entrust the Tax Court with the power to determine the merits of a tax assessment. In Medox Limited v The Commissioner for the South African Revenue Service(2) the North Gauteng High Court was recently faced with the question of whether the High Court has the necessary jurisdiction to rule on the legal status of income tax assessments.
Know the rules when hiring a tax practitioner
You are ultimately responsible for filing your income tax return, even if a tax practitioner submits the return on your behalf. And if the South African Revenue Service (SARS) levies a penalty and interest for the late or non-submission of your return, you – not the practitioner – are liable to pay it. However, Professor Sharon Smulders, the head of tax policy technical and research at the South African Institute of Tax Practitioners (Sait), says that if your return was filed late because of a failure on the part of a practitioner or accountant, such as neglecting to remind you to submit your paperwork in time, this constitutes unprofessional conduct and is a breach of the code of conduct prescribed by most professional bodies to which tax practitioners must belong.
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.
Remedy for declined tax clearance certificate
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.
Tax Court determines merit of tax assessments
The Tax Court is a specialist court specifically equipped to adjudicate on tax-related matters pertaining to the lawfulness and correctness of disputed assessments. Sections 104 to 107 of the Tax Administration Act, No 28 of 2011 (previously s81 to 88 of the Income Tax Act, No 58 of 1962 (Act)) together with the rules of the Tax Court, prescribe the procedures to be followed where a tax assessment is disputed and essentially entrusts the Tax Court with the power to determine the merits of a tax assessment.
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”
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.
Tax collection remains buoyant
Finance Minister Pravin Gordhan says tax revenue remains “buoyant” despite a global economic turmoil that has tested South Africa’s finances. Announcing the preliminary outcomes of revenue collection for the 2013/14 fiscal year, Gordhan said the overall revenue collected by SA Revenue Service as of midnight on Monday March 31, was R899.7bn. This is R0.7bn more than the revised estimate in the 2014 Budget.