Category: Tax Administration Act No. 28 of 2011

Section 48 (TAA) – Field audit or criminal investigation

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48.    Field audit or criminal investigation

 

(1)     A SARS official named in an authorisation referred to in section 41 may require a person, with prior notice of at least 10 business days, to make available at the person’s premises specified in the notice relevant material that the official may require to audit or criminally investigate in connection with the administration of a tax Act in relation to the person or another person.

 

(2)     The notice referred to in subsection (1) must-

 

(a)     state the place where and the date and time that the audit or investigation is due to start (which must be during normal business hours); and

  

(b)     indicate the initial basis and scope of the audit or investigation.

 

(3)     SARS is not required to give the notice if the person waives the right to receive the notice.

 

(4)     If a person at least five business days before the date listed in the notice advances reasonable grounds for varying the notice, SARS may vary the notice accordingly, subject to conditions SARS may impose with regard to preparatory measures for the audit or investigation.

 

(5)     A SARS official may not enter a dwelling-house or domestic premises, except any part thereof used for the purposes of trade, under this section without the consent of the occupant.

Section 62 (TAA) – Search of premises not identified in warrant

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62.    Search of premises not identified in warrant

 

(1)     If a senior SARS official has reasonable grounds to believe that-

 

(a)     the relevant material referred to in section 60(1)(b) and included in a warrant is at premises not identified in the warrant and may be removed or destroyed;

 

(b)     a warrant cannot be obtained in time to prevent the removal or destruction of the relevant material; and

 

(c)     the delay in obtaining a warrant would defeat the object of the search and seizure,

 

a SARS official may enter and search the premises and exercise the powers granted in terms of this Part, as if the premises had been identified in the warrant.

 

(2)     A SARS official may not enter a dwelling-house or domestic premises, except any part thereof used for purposes of trade, under this section without the consent of the occupant.

Section 29 (TAA) – Duty to keep records

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29.  Duty to keep records

 

(1)     A person must keep the records, books of account or documents that-

 

(a)     enable the person to observe the requirements of a tax Act;

 

(b)     are specifically required under a tax Act or by the Commissioner by public notice; and

 

(c)     enable SARS to be satisfied that the person has observed these requirements.

 

(2)     The requirements of this Act to keep records, books of account or documents for a tax period apply to a person who-

 

(a)     has submitted a return for the tax period;

 

(b)     is required to submit a return for the tax period and has not submitted a return for the tax period; or

 

(c)     is not required to submit a return but has, during the tax period, received income, has a capital gain or capital loss, or engaged in any other activity that is subject to tax or would be subject to tax but for the application of a threshold or exemption.

 

(3)     Records, books of account or documents need not be retained by the person described in-

 

(a)     subsection (2)(a), after a period of five years from the date of the submission of the return; and

 

(b)     subsection (2)(c), after a period of five years from the end of the relevant tax period.

Section 36 (TAA) – Excluded arrangements

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36.  Excluded arrangements

(1)     An ‘arrangement’ is an excluded ‘arrangement’ if it is-

(a)     a debt in terms of which-

(i)      the borrower receives or will receive an amount of cash and agrees to repay at least the same amount of cash to the lender at a determinable future date; or

(ii)     the borrower receives or will receive a fungible asset and agrees to return an asset of the same kind and of the same or equivalent quantity and quality to the lender at a determinable future date;

(b)     a lease;

(c)     a transaction undertaken through an exchange regulated in terms of the Financial Markets Act, 2012 (Act 19 of 2012); or

[Paragraph (c) substituted by section 40 of Act 23 of 2015]

(d)     a transaction in participatory interests in a scheme regulated in terms of the Collective Investment Schemes Control Act, 2002 (Act No. 45 of 2002).

(2)     Subsection (1) applies only to an ‘arrangement’ that-

(a)     is undertaken on a stand-alone basis and is not directly or indirectly connected to any other ‘arrangement’ (whether entered into between the same or different parties); or

(b)     would have qualified as having been undertaken on a stand-alone basis as required by paragraph (a), were it not for a connected ‘arrangement’ that is entered into for the sole purpose of providing security and if no ‘tax benefit’ is obtained or enhanced by virtue of the security ‘arrangement’.

(3)     Subsection (1) does not apply to an ‘arrangement’ that is entered into-

(a)     with the main purpose or one of its main purposes of obtaining or enhancing a ‘tax benefit’; or

(b)     in a specific manner or form that enhances or will enhance a ‘tax benefit’.

(4)     The Commissioner may determine an “arrangement” to be an excluded “arrangement” by public notice.

Section 49 (TAA) – Assistance during field audit or criminal investigation

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49.    Assistance during field audit or criminal investigation

(1)     The person on whose premises an audit or criminal investigation is carried out and any other person on the premises, must provide such reasonable assistance as is required by SARS to conduct the audit or investigation, including-

(a)     making available appropriate facilities, to the extent that such facilities are available;

(b)     answering questions relating to the audit or investigation including, if so required, in the manner referred to in section 46(7); and

[Paragraph (b) substituted by section 44 of Act 23 of 2015 effective on 8 January 2016]

(c)     submitting relevant material as required.

(2)     No person may without just cause-

(a)     obstruct a SARS official from carrying out the audit or investigation; or

(b)     refuse to give the accessor assistance as maybe required under subsection(1).

(3)     The person may recover from SARS after completion of the audit or criminal investigation (or, at the person’s request, on a monthly basis) the costs for the use of photocopying facilities in accordance with the fees prescribed in section 92(1)(b) of the Promotion of Access to Information Act.

Section 63 (TAA) – Search without warrant

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63.    Search without warrant

 

(1)     A senior SARS official may without a warrant exercise the powers referred to in section 61(3)-

 

(a)     if the owner or person in control of the premises so consents in writing; or

 

(b)     if the senior SARS official on reasonable grounds is satisfied that-

 

(i)      there may be an imminent removal or destruction of relevant material likely to be found on the premises;

 

(ii)     if SARS applies for a search warrant under section 59, a search warrant will be issued; and

 

(iii)    the delay in obtaining a warrant would defeat the object of the search and seizure.

 

(2)     A SARS official must, before carrying out the search, inform the owner or person in control of the premises-

 

(a)     that the search is being conducted under this section; and

 

(b)     of the alleged failure to comply with an obligation imposed under a tax Act or tax offence that is the basis for the search.

 

(3)     Section 61(4) to (8) applies to a search conducted under this section.

 

(4)     A SARS official may not enter a dwelling-house or domestic premises, except any part thereof used for purposes of trade, under this section without the consent of the occupant.

 

(5)     If the owner or person in control of the premises is not present, the SARS official must inform such person of the circumstances referred to in subsection (2) as soon as reasonably possible after the execution of the search and seizure.

Section 30 (TAA) – Form of records kept or retained

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30.  Form of records kept or retained

 

(1)     The records, books of account, and documents referred to in section 29, must be kept or retained-

 

(a)     in their original form in an orderly fashion and in a safe place;

 

(b)     in the form, including electronic form, as may be prescribed by the Commissioner in a public notice; or

 

(c)     in a form specifically authorised by a senior SARS official in terms of subsection (2).

 

(2)     A senior SARS official may, subject to the conditions as the official may determine, authorise the retention of information contained in records, books of account or documents referred to in section 29 in a form acceptable to the official.

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.

Section 64 (TAA) – Legal professional privilege

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64.    Legal professional privilege

(1)     If SARS foresees the need to search and seize relevant material that may be alleged to be subject to legal professional privilege, SARS must arrange for a legal practitioner from the panel appointed under section 111 to be present during the execution of the warrant.

[Subsection (1) substituted by section 31 of Act 33 of 2019]

(2)     A legal practitioner with whom SARS has made an arrangement in terms of subsection (1) may appoint a substitute legal practitioner to be present on the appointing legal practitioner’s behalf during the execution of a warrant.

[Subsection (2) substituted by section 31 of Act 33 of 2019]

(3)     If, during the carrying out of a search and seizure by SARS, a person alleges the existence of legal professional privilege in respect of relevant material and a legal practitioner is not present under subsection (1) or (2), SARS must seal the material, make arrangements with a legal practitioner from the panel appointed under section 111 to take receipt of the material and, as soon as is reasonably possible, hand over the material to the legal practitioner.

[Subsection (3) substituted by section 31 of Act 33 of 2019]

(4)     A legal practitioner referred to in subsections (1), (2) and (3)-

(a)       is not regarded as acting on behalf of either party; and

(b)       must personally take responsibility-

(i)      in the case of a warrant issued under section 60, for the removal from the premises of relevant material in respect of which legal privilege is alleged;

(ii)     in the case of a search and seizure carried out under section 63, for the receipt of the sealed information; and

(iii)     if a substitute legal practitioner in terms of subsection (2), for the delivery of the information to the appointing legal practitioner for purposes of making the determination referred to in subsection (5).

[Subsection (4) substituted by section 31 of Act 33 of 2019]

(5)     The legal practitioner referred to in subsection (1) or (3) must, within 21 business days, make a determination of whether the privilege applies and may do so in the manner the legal practitioner deems fit, including considering representations made by the parties.

[Subsection (5) substituted by section 31 of Act 33 of 2019]

(6)     If a determination of whether the privilege applies is not made under subsection (5) or a party is not satisfied with the determination, the legal practitioner must retain the relevant material pending final resolution of the dispute by the parties or an order of court.

[Subsection (6) substituted by section 31 of Act 33 of 2019]

(7)     The legal practitioner from the panel appointed under section 111 and any legal practitioner acting on behalf of that legal practitioner referred to in subsection (1) must be compensated in the same manner as if acting as Chairperson of the tax board.

[Subsection (7) substituted by section 31 of Act 33 of 2019]