Author: admin_kmos

Section 44 (TAA) – Conduct of criminal investigation

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44.  Conduct of criminal investigation

(1)     During a criminal investigation, SARS must apply the information gathering powers in terms of this Chapter with due recognition of the taxpayer’s constitutional rights as a suspect in a criminal investigation.

(2)     In the event that a decision is taken to pursue the criminal investigation of a serious tax offence, SARS may make use of relevant material obtained prior to the referral referred to in section 43.

(3)   Relevant material obtained during a criminal investigation may be used for purposes of audit as well as in subsequent civil and criminal proceedings.

[Subsection (3) substituted by section 17 of Act 22 of 2018.]

Section 43 (TAA) – Referral for criminal investigation

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43.  Referral for criminal investigation

 

(1)     If at any time before or during the course of an audit it appears that a taxpayer may have committed a serious tax offence, the investigation of the offence must be referred to a senior SARS official responsible for criminal investigations for a decision as to whether a criminal investigation should be pursued.

 

(2)     Relevant material obtained under this Chapter from the taxpayer after the referral, must be kept separate from the criminal investigation.

 

(3)     If an investigation is referred under subsection (1) the relevant material and files relating to the case must be returned to the SARS official responsible for the audit if-

 

(a)     it is decided not to pursue a criminal investigation;

 

(b)     it is decided to terminate the investigation; or

 

(c)     after referral of the case for prosecution, a decision is made not to prosecute.

Section 42 (TAA) – Keeping taxpayer informed

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42.  Keeping taxpayer informed

(1) A SARS official involved in or responsible for an audit under this Chapter must, in the form and in the manner as may be prescribed by the Commissioner by public notice, provide the taxpayer with a notice of commencement of an audit and, thereafter, a report indicating the stage of completion of the audit.

[Subsection (1) substituted by section 48(a) of Act 21 of 2012 and by section 16 of Act 22 of 2018.]

(2)     Upon conclusion of the audit or a criminal investigation, and where-

(a)     the audit or investigation was inconclusive, SARS must inform the taxpayer accordingly within 21 business days; or

(b)     the audit identified potential adjustments of a material nature, SARS must within 21 business days, or the further period that may be required based on the complexities of the audit, provide the taxpayer with a document containing the outcome of the audit, including the grounds for the proposed assessment or decision referred to in section 104(2).

(3)     Upon receipt of the document described in subsection (2)(b), the taxpayer must within 21 business days of delivery of the document, or the further period requested by the taxpayer that may be allowed by SARS based on the complexities of the audit, respond in writing to the facts and conclusions set out in the document.

(4)     The taxpayer may waive the right to receive the document.

(5)     Subsections (1) and (2)(b) do not apply if a senior SARS official has a reasonable belief that compliance with those subsections would impede or prejudice the purpose, progress or outcome of the audit.

(6)     SARS may under the circumstances described in subsection (5) issue the assessment or make the decision referred to in section 104(2) resulting from the audit and the grounds of the assessment or decision must be provided to the taxpayer within 21 business days of the assessment or the decision, or the further period that may be required based on the complexities of the audit or the decision.

Section 41 (TAA) – Authorisation for SARS official to conduct audit or criminal investigation

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41.  Authorisation for SARS official to conduct audit or criminal investigation

 

(1)     A senior SARS official may grant a SARS official written authorisation to conduct a field audit or criminal investigation, as referred to in Part B.

 

(2)     When a SARS official exercises a power or duty under a tax Act in person, the official must produce the authorisation.

 

(3)     If the official does not produce the authorisation, a member of the public is entitled to assume that the official is not a SARS official so authorised.

Section 38 (TAA) – Information to be submitted

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38.  Information to be submitted

 

The following information in relation to a “reportable arrangement”, must be submitted in the prescribed form and manner and by the date specified:

 

(a)     a detailed description of all its steps and key features, including, in the case of an ‘arrangement’ that is a step or part of a larger ‘arrangement’, all the steps and key features of the larger ‘arrangement’;

 

(b)     a detailed description of the assumed ‘tax benefits’ for all ‘participants’, including, but not limited to, tax deductions and deferred income;

 

(c)     the names, registration numbers, and registered addresses of all ‘participants’;

 

(d)     a list of all its agreements; and

 

(e)     any financial model that embodies its projected tax treatment.

Section 37 (TAA) – Disclosure obligation

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37.  Disclosure obligation

 

(1)     The information referred to in section 38 in respect of a “reportable arrangement” must be disclosed by a person who-

 

(a)     is a “participant” in an “arrangement” on the date on which it qualifies as a “reportable arrangement”, within 45 business days after that date; or

 

(b)     becomes a “participant” in an “arrangement” after the date on which it qualifies as a “reportable arrangement”, within 45 business days after becoming a “participant”.

 

(2)     ……….

 

(3)     A “participant” need not disclose the information if the “participant” obtains a written statement from any other “participant” that the other “participant” has disclosed the “reportable arrangement”.

 

(4)     ……….

 

(5)     SARS may grant extension for disclosure for a further 45 business days, if reasonable grounds exist for the extension.