Category: Tax Administration Act No. 28 of 2011

Section 57 (TAA) – Incriminating evidence

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57.    Incriminating evidence

 

(1)     A person may not refuse to answer a question during an inquiry on the grounds that it may incriminate the person.

 

(2)     Incriminating evidence obtained under this section is not admissible in criminal proceedings against the person giving the evidence, unless the proceedings relate to-

 

(a)     the administering or taking of an oath or the administering or making of a solemn declaration;

 

(b)     the giving of false evidence or the making of a false statement; or

 

(c)     the failure to answer questions lawfully put to the person, fully and satisfactorily.

Section 71 (TAA) – Disclosure in criminal, public safety or environmental matters

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71.    Disclosure in criminal, public safety or environmental matters

 

(1)     If so ordered by a judge under this section, a senior SARS official must disclose the information described in subsection (2) to-

 

(a)     the National Commissioner of the South African Police Service, referred to in section 6(1) of the South African Police Service Act, 1995 (Act No. 68 of 1995); or

 

(b)     the National Director of Public Prosecutions, referred to in section 5(2)(a) of the National Prosecuting Authority Act, 1998 (Act No. 32 of 1998).

 

(2)     Subsection (1) applies to information which may reveal evidence-

 

(a)     that an offence (other than a tax offence) has been or may be committed in respect of which a court may impose a sentence of imprisonment exceeding five years;

 

(b)     that may be relevant to the investigation or prosecution of the offence; or

 

(c)     of an imminent and serious public safety or environmental risk.

 

(3)     A senior SARS official may, if of the opinion that-

 

(a)     SARS has information referred to in subsection (2);

 

(b)     the information will likely be material to the prosecution of the offence or avoidance of the risk; and

 

(c)     the disclosure of the information would not seriously impair a civil or criminal tax investigation,

 

make an ex parte application to a judge in chambers for an order authorising SARS to disclose the information under subsection (1).

 

(4)     The National Commissioner of the South African Police Service, the National Director of Public Prosecutions or a person acting under their respective direction and control, if-

 

(a)     carrying out an investigation relating to an offence or a public safety or environmental risk referred to in subsection (2); and

 

(b)     of the opinion that SARS may have information that is relevant to that investigation,

 

may make an ex parte application to a judge in chambers for an order requiring SARS to disclose the information referred to in subsection (2).

 

(5)     SARS must be given prior notice of at least 10 business days of an application under subsection (4) unless the judge, based on urgency, allows a shorter period and SARS may oppose the application on the basis that the disclosure would seriously impair or prejudice a civil or criminal tax investigation or other enforcement of a tax Act by SARS.

“Participant” definition of section 34 of TAA

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“participant”, in relation to an ‘arrangement’, means-

(a)     a “promoter”;

(b)     a person who directly or indirectly will derive or assumes that the person will derive a “tax benefit” or “financial benefit” by virtue of an “arrangement”; or

(c)     any other person who is party to an “arrangement” listed in a public notice referred to in section 35(2);

[Definition of “participant” substituted by section 40 of Act 44 of 2014 effective on 20 January 2015 and section 39 of Act 23 of 2015 effective on 8 January2016]

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 58 (TAA) – Inquiry not suspended by civil or criminal proceedings

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58.    Inquiry not suspended by civil or criminal proceedings

 

Unless a court orders otherwise, an inquiry relating to a person referred to in section 51(1)(a) must proceed despite the fact that a civil or criminal proceeding is pending or contemplated against or involves the person, a witness or potential witness in the inquiry, or another person whose affairs may be investigated in the course of the inquiry.

Section 72 (TAA) – Self-incrimination

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72.    Self-incrimination

 

(1)     A taxpayer may not refuse to comply with his or her obligations in terms of legislation to complete and file a return or an application on the grounds that to do so might incriminate him or her, and an admission by the taxpayer contained in a return, application, or other document submitted to SARS by a taxpayer is admissible in criminal proceedings against the taxpayer for a tax offence, unless a competent court directs otherwise.

 

(2)     An admission by the taxpayer of the commission of a tax offence obtained from a taxpayer under Chapter 5 is not admissible in criminal proceedings against the taxpayer, unless a competent court directs otherwise.

“Pre-tax profit” definition of section 34 of TAA

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‘pre-tax profit’, in relation to an ‘arrangement’, means the profit of a ‘participant’ resulting from that ‘arrangement’ before deducting normal tax, which profit must be determined in accordance with ‘financial reporting standards’ after taking into account all costs and expenditure incurred by the ‘participant’ in connection with the ‘arrangement’ and after deducting any foreign tax paid or payable by the ‘participant’ in connection with the ‘arrangement’;