Tax Administration Act 28 of 2011

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TAX ADMINISTRATION ACT 28 OF 2011

(English text signed by the President)

[Assented to: 2 July 2012]

[Commencement date: 1 October 2012, except for sections 187(2), (3)(a) to (e) and (4), 188(2) and (3) and 189(2) and (5) of the Act; and

any provision of Schedule 1 to the Act that amends or repeals a provision of a tax Act relating to interest under that tax Act, to the extent of that amendment or repeal]

[Proc. 51 / GG 35687 / 20120914]

as amended by:

Tax Administration Laws Amendment Act 21 of 2012

Employment Tax Incentive Act 26 of 2013

Tax Administration Laws Amendment Act 39 of 2013

Tax Administration Laws Amendment Act 44 of 2014

proposed amendments by:

Tax Administration Laws Amendment Act 44 of 2014

GENERAL EXPLANATORY NOTE:

[   ]Words in bold type in square brackets indicate omissions from existing enactments.

_____ Words underlined with a solid line indicate insertions in existing enactments.

ACT

To provide for the effective and efficient collection of tax; to provide for the alignment of the administration provisions of tax Acts and the consolidation of the provisions into one piece of legislation to the extent practically possible; to determine the powers and duties of the South African Revenue Service and officials; to provide for the delegation of powers by the Commissioner; to provide for the authority to act in legal proceedings; to determine the powers and duties of the Minister of Finance; to provide for the establishment of the office of the Tax Ombud; to determine the powers and duties of the Tax Ombud; to provide for registration requirements; to provide for the submission of returns and the duty to keep records; to provide for reportable arrangements; to provide for the request for information; to provide for the carrying out of an audit or investigation by the South African Revenue Service; to provide for inquiries; to provide for powers of the South African Revenue Service to carry out searches and seizures; to provide for the confidentiality of information; to provide for the South African Revenue Service to issue advance rulings; to make provision in respect of tax assessments; to provide for dispute resolution; to make provision for the payment of tax; to provide for the recovery of tax; to provide for the South African Revenue Service to recover interest on outstanding tax debts; to provide for the refund of excess payments; to provide for the write-off and compromise of tax debts; to provide for the imposition and remittance of administrative non-compliance penalties; to provide for the imposition of understatement penalties; to provide for a voluntary disclosure programme; to provide for criminal offences and sanctions; to provide for the reporting of unprofessional conduct by tax practitioners; and to provide for matters connected therewith.

BE IT ENACTED by the Parliament of the Republic of South Africa, as follows:-

ARRANGEMENT OF SECTIONS

Sections

 

CHAPTER 1

DEFINITIONS

 

  1. Definitions

 

CHAPTER 2

GENERAL ADMINISTRATION PROVISIONS

 

Part A

In general

 

  1. Purpose of Act
  2. Administration of tax Acts
  3. Application of Act
  4. Practice generally prevailing

 

Part B

Powers and duties of SARS and SARS officials

 

  1. Powers and duties
  2. Conflict of interest
  3. Identity cards
  4. Decision or notice by SARS

 

Part C

Delegations

 

  1. Delegations by the Commissioner

 

Part D

Authority to act in legal proceedings

 

  1. Legal proceedings involving Commissioner
  2. Right of appearance in proceedings

 

Part E

Powers and duties of Minister

 

  1. Powers and duties of Minister
  2. Power of Minister to appoint Tax Ombud

 

Part F

Powers and duties of Tax Ombud

 

  1. Office of Tax Ombud
  2. Mandate of Tax Ombud
  3. Limitations on authority
  4. Review of complaint
  5. Reports by Tax Ombud
  6. Resolution and recommendations
  7. Confidentiality

 

CHAPTER 3

REGISTRATION

 

  1. Registration requirements
  2. Communication of changes in particulars
  3. Taxpayer reference number

 

CHAPTER 4

RETURNS AND RECORDS

 

Part A

General

 

  1. Submission of return
  2. Third party returns
  3. Other returns required
  4. Statement concerning accounts
  5. Duty to keep records
  6. Form of records kept or retained
  7. Inspection of records
  8. Retention period in case of audit, objection or appeal
  9. Translation

 

Part B

Reportable arrangements

 

  1. Definitions
  2. Reportable arrangements
  3. Excluded arrangements
  4. Disclosure obligation
  5. Information to be submitted
  6. Reportable arrangement reference number

 

CHAPTER 5

INFORMATION GATHERING

 

Part A

General rules for inspection, verification, audit and criminal investigation

 

  1. Selection for inspection, verification or audit
  2. Authorisation for SARS official to conduct audit or criminal investigation
  3. Keeping taxpayer informed
  4. Referral for criminal investigation
  5. Conduct of criminal investigation

 

Part B

Inspection, request for relevant material, audit and criminal investigation

 

  1. Inspection
  2. Request for relevant material
  3. Production of relevant material in person
  4. Field audit or criminal investigation
  5. Assistance during field audit or criminal investigation

 

Part C

Inquiries

 

  1. Authorisation for inquiry
  2. Inquiry order
  3. Inquiry proceedings
  4. Notice to appear
  5. Powers of presiding officer
  6. Witness fees
  7. Confidentiality of proceedings
  8. Incriminating evidence
  9. Inquiry not suspended by civil or criminal proceedings

 

Part D

Search and seizure

 

  1. Application for warrant
  2. Issuance of warrant
  3. Carrying out search
  4. Search of premises not identified in warrant
  5. Search without warrant
  6. Legal professional privilege
  7. Person’s right to examine and make copies
  8. Application for return of seized relevant material or costs of damages

 

CHAPTER 6

CONFIDENTIALITY OF INFORMATION

 

  1. General prohibition of disclosure
  2. SARS confidential information and disclosure
  3. Secrecy of taxpayer information and general disclosure
  4. Disclosure to other entities
  5. Disclosure in criminal, public safety or environmental matters
  6. Self-incrimination
  7. Disclosure to taxpayer of own record
  8. Publication of names of offenders

 

CHAPTER 7

ADVANCE RULINGS

 

  1. Definitions
  2. Purpose of advance rulings
  3. Scope of advance rulings
  4. Private rulings and class rulings
  5. Applications for advance rulings
  6. Rejection of application for advance ruling
  7. Fees for advance rulings
  8. Binding effect of advance rulings
  9. Applicability of advance rulings
  10. Rulings rendered void
  11. Subsequent changes in tax law
  12. Withdrawal or modification of advance rulings
  13. Publication of advance rulings
  14. Non-binding private opinions
  15. General rulings
  16. Procedures and guidelines for advance rulings

 

CHAPTER 8

ASSESSMENTS

 

  1. Original assessments
  2. Additional assessments
  3. Reduced assessments
  4. Jeopardy assessments
  5. Estimation of assessments
  6. Notice of assessment
  7. Recording of assessments
  8. Withdrawal of assessments
  9. Period of limitations for issuance of assessments
  10. Finality of assessment or decision

 

CHAPTER 9

DISPUTE RESOLUTION

 

Part A

General

 

  1. Definitions
  2. Burden of proof
  3. Rules for dispute resolution

 

Part B

Objection and appeal

 

  1. Objection against assessment or decision
  2. Forum for dispute of assessment or decision
  3. Decision on objection
  4. Appeal against assessment or decision

 

Part C

Tax board

 

  1. Establishment of tax board
  2. Jurisdiction of tax board
  3. Constitution of tax board
  4. Appointment of chairpersons
  5. Clerk of tax board
  6. Tax board procedure
  7. Decision of tax board
  8. Referral of appeal to tax court

 

Part D

Tax court

 

  1. Establishment of tax court
  2. Jurisdiction of tax court
  3. Constitution of tax court
  4. Nomination of president of tax court
  5. Appointment of panel of tax court members
  6. Appointment of registrar of tax court
  7. Conflict of interest of tax court members
  8. Death, retirement or incapability of judge or member
  9. Sitting of tax court not public
  10. Appearance at hearing of tax court
  11. Subpoena of witness to tax court
  12. Non-attendance by witness or failure to give evidence
  13. Contempt of tax court
  14. Decision by tax court
  15. Order for costs by tax court
  16. Registrar to notify parties of judgment of tax court
  17. Publication of judgment of tax court

 

Part E

Appeal against tax court decision

 

  1. Appeal against decision of tax court
  2. Notice of intention to appeal tax court decision
  3. Leave to appeal to Supreme Court of Appeal against tax court decision
  4. Failure to lodge notice of intention to appeal tax court decision
  5. Notice by registrar of period for appeal of tax court decision
  6. Notice of appeal to Supreme Court of Appeal against tax court decision
  7. Notice of cross-appeal of tax court decision
  8. Record of appeal of tax court decision
  9. Abandonment of judgment

 

Part F

Settlement of dispute

 

  1. Definitions
  2. Purpose of Part
  3. Initiation of settlement procedure
  4. Circumstances where settlement is inappropriate
  5. Circumstances where settlement is appropriate
  6. Procedure for settlement
  7. Finality of settlement agreement
  8. Register of settlements and reporting
  9. Alteration of assessment or decision on settlement

 

CHAPTER 10

TAX LIABILITY AND PAYMENT

 

Part A

Taxpayers

 

  1. Taxpayer
  2. Person chargeable to tax
  3. Representative taxpayer
  4. Liability of representative taxpayer
  5. Personal liability of representative taxpayer
  6. Withholding agent
  7. Personal liability of withholding agent
  8. Responsible third party
  9. Personal liability of responsible third party
  10. Right to recovery of taxpayer
  11. Security by taxpayer

 

Part B

Payment of tax

 

  1. Determination of time and manner of payment of tax
  2. Preservation order
  3. Payment of tax pending objection or appeal

 

Part C

Taxpayer account and allocation of payments

 

  1. Taxpayer account
  2. Allocation of payments

 

Part D

Deferral of payment

 

  1. Instalment payment agreement
  2. Criteria for instalment payment agreement

 

CHAPTER 11

RECOVERY OF TAX

 

Part A

General

 

  1. Debt due to SARS
  2. Evidence as to assessment
  3. Period of limitation on collection of tax

 

Part B

Judgment procedure

 

  1. Application for civil judgment for recovery of tax
  2. Jurisdiction of Magistrates’ Court in judgment procedure
  3. Effect of statement filed with clerk or registrar
  4. Amendment of statement filed with clerk or registrar
  5. Withdrawal of statement and reinstitution of proceedings

 

Part C

Sequestration, liquidation and winding-up proceedings

 

  1. Institution of sequestration, liquidation or winding-up proceedings
  2. Jurisdiction of court in sequestration, liquidation or winding-up proceedings

 

Part D

Collection of tax debt from third parties

 

  1. Liability of third party appointed to satisfy tax debts
  2. Liability of financial management for tax debts
  3. Liability of shareholders for tax debts
  4. Liability of transferee for tax debts
  5. Liability of person assisting in dissipation of assets
  6. Recovery of tax debts from other persons

 

Part E

Assisting foreign governments

 

  1. Tax recovery on behalf of foreign governments

 

Part F

Remedies with respect to foreign assets

 

  1. Compulsory repatriation of foreign assets of taxpayer

 

CHAPTER 12

INTEREST

 

  1. General interest rules
  2. Period over which interest accrues
  3. Rate at which interest is charged

 

CHAPTER 13

REFUNDS

 

  1. Refunds of excess payments
  2. Refunds subject to set-off and deferral

 

CHAPTER 14

WRITE OFF OR COMPROMISE OF TAX DEBTS

 

Part A

General provisions

 

  1. Definitions
  2. Purpose of Chapter
  3. Application of Chapter

 

Part B

Temporary write off of tax debt

 

  1. Temporary write off of tax debt
  2. Tax debt uneconomical to pursue

 

Part C

Permanent write off of tax debt

 

  1. Permanent write off of tax debt
  2. Tax debt irrecoverable at law
  3. Procedure for writing off tax debt

 

Part D

Compromise of tax debt

 

  1. Compromise of tax debt
  2. Request by debtor for compromise of tax debt
  3. Consideration of request to compromise tax debt
  4. Circumstances where not appropriate to compromise tax debt
  5. Procedure for compromise of tax debt
  6. SARS not bound by compromise of tax debt

 

Part E

Records and reporting

 

  1. Register of tax debts written off or compromised
  2. Reporting by Commissioner of tax debts written off or compromised

 

CHAPTER 15

ADMINISTRATIVE NON-COMPLIANCE PENALTIES

 

Part A

General

 

  1. Definitions
  2. Purpose of Chapter

 

Part B

Fixed amount penalties

 

  1. Non-compliance subject to penalty
  2. Fixed amount penalty table
  3. Reportable arrangement penalty

 

Part C

Percentage based penalty

 

  1. Imposition of percentage based penalty

 

Part D

Procedure

 

  1. Procedures for imposing penalty
  2. Procedure to request remittance of penalty

 

Part E

Remedies

 

  1. Remittance of penalty for failure to register
  2. Remittance of penalty for nominal or first incidence of non-compliance
  3. Remittance of penalty in exceptional circumstances
  4. Penalty incorrectly assessed
  5. Objection and appeal against decision not to remit penalty

 

CHAPTER 16

UNDERSTATEMENT PENALTY

 

Part A

Imposition of understatement penalty

 

  1. Definitions
  2. Understatement penalty
  3. Understatement penalty percentage table
  4. Objection and appeal against imposition of understatement penalty

 

Part B

Voluntary disclosure programme

 

  1. Definitions
  2. Qualifying person for voluntary disclosure
  3. Requirements for valid voluntary disclosure
  4. No-name voluntary disclosure
  5. Voluntary disclosure relief
  6. Voluntary disclosure agreement
  7. Withdrawal of voluntary disclosure relief
  8. Assessment or determination to give effect to agreement
  9. Reporting of voluntary disclosure agreements

 

CHAPTER 17

CRIMINAL OFFENCES

 

  1. Criminal offences relating to non-compliance with tax Acts
  2. Evasion of tax and obtaining undue refunds by fraud or theft
  3. Criminal offences relating to secrecy provisions
  4. Criminal offences relating to filing return without authority
  5. Jurisdiction of courts in criminal matters

 

CHAPTER 18

REGISTRATION OF TAX PRACTITIONERS AND REPORTING OF UNPROFESSIONAL CONDUCT

 

  1. Definitions
  2. Registration of tax practitioners

240A.Recognition of controlling bodies

  1. Complaint to controlling body
  2. Disclosure of information regarding complaint and remedies of taxpayer
  3. Complaint considered by controlling body

 

CHAPTER 19

GENERAL PROVISIONS

 

  1. Deadlines
  2. Power of Minister to determine date for submission of returns and payment of tax
  3. Public officers of companies
  4. Company address for notices and documents
  5. Public officer in event of liquidation, winding-up or business rescue
  6. Default in appointing public officer or address for notices or documents
  7. Authentication of documents
  8. Delivery of documents to persons other than companies
  9. Delivery of documents to companies
  10. Documents delivered deemed to have been received
  11. Defect does not affect validity
  12. Rules for electronic communication
  13. Tax compliance status
  14. Regulations by Minister

 

CHAPTER 20

TRANSITIONAL PROVISIONS

 

  1. New taxpayer reference number
  2. Appointment of Tax Ombud
  3. Provisions relating to secrecy
  4. Public officer previously appointed
  5. Appointment of chairpersons of tax board
  6. Appointment of members of tax court
  7. Continuation of tax board, tax court and court rules
  8. Continuation of appointment to a post or office or delegation by Commissioner
  9. Continuation of authority to audit
  10. Conduct of inquiries and execution of search and seizure warrants
  11. Application of Chapter 15
  12. Continuation of authority, rights and obligations
  13. Application of Act to prior or continuing action
  14. Amendment of legislation
  15. Short title and commencement

 

SCHEDULE 1