Withdrawal of assessments under the Tax Administration Act

Author: Danielle Botha (DLA CLiff Dekker Hofmeyer) Section 98 of the Tax Administration Act, No 28 of 2011 (TAA) makes provision for the withdrawal of an assessment by the South African Revenue Service (SARS) in certain circumstances. Prior to its amendment, s98 allowed for the withdrawal of an assessment (despite no appeal having been noted or objection lodged), that was: a)  issued to the incorrect taxpayer;   b)  issued in respect of the incorrect tax period; or   c)  issued as a result of an incorrect payment allocation. 

New page on the institution of legal proceedings

Author: SARS Legal and Policy What is it? The institution of legal proceedings is a process whereby a taxpayer delivers court papers to SARS requiring the Commissioner for SARS to appear and defend a matter in the High Court. Prior notice before the institution of the proceedings is required in some instances, particular in matters involving the State. What does the tax and customs laws say? There are two different Acts in terms of which the institution of legal proceedings against the Commissioner for SARS is governed and although they have a similar purpose, the requirements are not identical. 

Tax Administration Act – Understatement penalty changes

Current provisions of the Tax Administration Act The Tax Administration Act No. 28 of 2011 (the TAA) became effective on 1 October 2012 and introduced the understatement penalty regime. In terms of section 222 of the TAA, a taxpayer must pay an understatement penalty in addition to the tax payable for the relevant tax period in the event of an “understatement”. What constitutes an “understatement”? An “understatement” is defined as any prejudice to the South African Revenue Service (SARS) or the fiscus in respect of a tax period as a result of:

GW van der Merwe & 12 Others v CSARS – HC 1984-14 WC – 17 February 2014

Introduction The Western Cape High Court recently delivered its judgement in the application lodged by the first applicant being GW van der Merwe and others, for an order that a temporary interdict be issued preventing the second respondent, Piet JJ Marais, from commencing an inquiry authorised by Davis J, in terms of a court order made by virtue of the provisions of Part C of Chapter 5 of the Tax Administration Act, No 28 of 2011, pending the final outcome of an application to declare the relevant provisions of the Tax Administration Act which authorises such enquiry unconstitutional and invalid. Further, the applicants requested an order to have the third applicant, Elle-Sarah Rossato, to allow them access to the court file in order to enable the aforesaid review application to be made. 

SARS shortens time between date of assessment and 'second date'

In order to avoid interest on the late payment of assessed income tax, taxpayers have to pay outstanding tax by the ‘second date’ indicated on the income tax assessment. We are finding that SARS has shortened the number of days between the date of assessment and the second date in many cases, to only a few days. If your income tax calculation indicated that you will have to make a payment to SARS, please be aware that you may have to make the payment within a few days of submission of your return, in order to avoid interest.

VAT – where to lodge objection – Tax Court or High Court?

The Pretoria Tax Court made an interesting ruling in ITC No 1866 [2013] 75 SATC 268. Section 32(1) of the Value-Added Tax Act No. 89 of 1991 (the VAT Act) states that the following decisions of the South African Revenue Service (SARS) are subject to objection and appeal, namely: In terms of section 23(7) of the VAT Act notifying that person of SARS’s refusal to register that person in terms of the VAT Act. In terms of section 24(6) or (7) of the VAT Act notifying a person of SARS’s decision to cancel, or refusal to cancel his registration in terms of the VAT Act.

Ringo’s R1.5m ‘tax fraud’

                   Afro soul musician Ringo Madlingozi could face up to 15 years in jail or a hefty fine if he is found guilty of tax fraud and theft, said a tax lawyer on Sunday. Madlingozi allegedly hasn’t been paying his employees’ Pay As You Earn (PAYE) to SARS, but has been deducting it from their salaries since 1999. He reportedly owes SARS R1.5m in PAYE and R421693 in VAT. A charge sheet, which The New Age has seen, shows that the star has been hit with more than 40 charges of theft by SARS. He appeared in the Johannesburg Magistrate’s Court on Wednesday and is expected to be back in court on 9 January 2014.

Taxpayer – choose your weapon carefully

The Pretoria Tax Court made an interesting ruling in Income Tax Case No 1866 75 SATC 268.Section 32(1) of the Value-Added Tax Act, No 89 of 1991 (VAT Act) states that the following decisions of the South African Revenue Service (SARS) are subject to objection and appeal, namely:

The remittance of administrative non-compliance penalties

Charl Hall, Tax Compliance Officer, Mazars   In terms of the Tax Administration Act (TAA)Since the enactment of the Tax Administration Act (TAA) the South African Revenue Services (Sars) has tightened the screws to encourage taxpayer compliance.  A number of new penalties are being introduced to ensure taxpayers are compliant and their tax affairs are in order. For taxpayers who have been charged with administrative non-compliance penalties, there is a light at the end of the tunnel as set out in Section 216 – 218 of the TAA.  In this regard, there are three remittance scenarios that can apply to a taxpayer.

SARS warns about ‘guaranteed refunds’

By Angelique Arde Beware of anyone who “guarantees” you a tax refund on submission of your tax return.This week, the South African Revenue Service (SARS) warned taxpayers of an increase in fraud involving “tax consultants” or intermediaries who promise clients substantial refunds in return for a 50-percent cut of the refund.