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Tag: Tax Administration Act (TAA)
In a recent Tax Court Judgment handed down on 25 February 2022, the court found in favour of an unnamed taxpayer, admonishing South African Revenue Service (SARS) for their persistent disregard for the time limits prescribed in the rules promulgated under Section 103 of the Tax Administration Act, 28 of 2011 (the Rules).
We have released a draft of South Africa’s first Compendium of Taxpayer Rights, Entitlements and Obligations, which informs taxpayers about their rights, entitlements and obligations concerning their tax affairs and engagements with the South African Revenue Service (SARS).
The Tax Court has again confirmed that there is no safety for taxpayers in relying on their auditor’s views to justify a tax position adopted. To the contrary, where a taxpayer infers that their tax position is justified 'because my auditor said so', it can actually result in a larger tax penalty.
The full bench of the Western Cape High court recently delivered judgment (Cloete J dissenting) in a favour of a taxpayer who, according to the Tax Court, was simply abusing process. When studying the judgment of the Tax Court, it is difficult to see how the taxpayer’s approach was anything more than an abuse of process which begs the question: Why was the taxpayer successful on appeal to the full bench of the High Court?
It has been widely reported that SARS has committed to probing the tax affairs, and information disclosed by High-Net-Worth Individuals (HNWI) on their tax returns, in order to determine their compliance with the respective tax legislation, with the establishment of the High Wealth Individual Taxpayer Segment (HWI).
The days where SARS shuts its eyes to taxpayers’ offshore holdings are thing of the past. SARS is finally utilising the Automatic Exchange of Information regime to pin down taxpayers who have not disclosed their offshore interests and numerous taxpayers have already received some alarming notices to this effect.
The hotly debated amendment to Section 10(1)(o)(ii) or 'Expatriate Exemption' took effect from 1 March 2020, with the questions on many expatriates’ minds often being 'how will SARS find me? What does the SARS audit of an expatriate look like and what questions should I expect?'
Transfer pricing audits can be onerous, but taxpayers can achieve a more successful outcome by providing all information requested, anticipating areas of concern, and engaging openly with the South African Revenue Services (SARS).
While a tax judgment may have all the effects of a judgment, it is not a judgment in the ordinary sense, but rather an enforcement mechanism for the recovery of tax. If a person has an outstanding tax debt, SARS may, after giving at least 10 business days’ notice, file with the court’s registrar a certified statement setting out the amount of tax payable.The effect of such filing is that it must be treated as a civil judgment lawfully given in favour of SARS for a liquid debt for the amount specified in the statement.