‘tax benefit’ means the avoidance, postponement, reduction or evasion of a liability for tax.
Category: Tax Administration Act No. 28 of 2011
Section 47 (TAA) – Production of relevant material in person
47. Production of relevant material in person
(1) A senior SARS official may, by notice, require a person, whether or not chargeable to tax, an employee of the person or a person who holds an office in the person to attend in person at the time and place designated in the notice for the purpose of being interviewed by a SARS official concerning the tax affairs of the person, if the interview-
(a) is intended to clarify issues of concern to SARS-
(i) to render further verification or audit unnecessary;
[Subparagraph (i) amended by section 17(a) of Act 43 of 2024]
(ii) to expedite a current verification or audit; or
[Subparagraph (ii) amended by section 17(b) of Act 43 of 2024]
(iii) to expedite an application for an instalment payment agreement, write-off or compromise of a tax debt; and
[Subparagraph (iii) added by section 17(c) of Act 43 of 2024]
(b) is not for purposes of a criminal investigation.
[Subsection (1) substituted by section 43 of Act 23 of 2015 effective on 8 January 2016]
(2) The senior SARS official issuing the notice may require the person interviewed to produce relevant material under the control of the person during the interview.
(3) Relevant material required by SARS under subsection (2) must be referred to in the notice with reasonable specificity.
(4) A person may decline to attend an interview, if the distance between the place designated in the notice and the usual place of business or residence of the person exceeds the distance prescribed by the Commissioner by public notice.
Section 61 (TAA) – Carrying out search
61. Carrying out search
(1) A SARS official exercising a power under a warrant referred to in section 60 must produce the warrant, and if the owner or person in control of the premises is not present, the SARS official must affix a copy of the warrant to the premises in a prominent and visible place.
(2) Subject to section 63, a SARS official’s failure to produce a warrant entitles a person to refuse access to the official.
(3) The SARS official may-
(a) open or cause to be opened or removed in conducting a search, anything which the official suspects to contain relevant material;
(b) seize any relevant material;
(c) seize and retain a computer or storage device in which relevant material is stored for as long as it is necessary to copy the material required;
(d) make extracts from or copies of relevant material, and require from a person an explanation of relevant material; and
(e) if the premises listed in the warrant is a vessel, aircraft or vehicle, stop and board the vessel, aircraft or vehicle, search the vessel, aircraft or vehicle or a person found in the vessel, aircraft or vehicle, and question the person with respect to a matter dealt with in a tax Act.
(4) The SARS official must make an inventory of the relevant material seized in the form, manner and at the time that is reasonable under the circumstances and provide a copy thereof to the person.
(5) The SARS official must conduct the search with strict regard for decency and order, and may search a person if the official is of the same gender as the person being searched.
(6) The SARS official may, at any time, request such assistance from a police officer as the official may consider reasonably necessary and the police officer must render the assistance.
(7) No person may obstruct a SARS official or a police officer from executing the warrant or without reasonable excuse refuse to give such assistance as may be reasonably required for the execution of the warrant.
(8) If the SARS official seizes relevant material, the official must ensure that the relevant material seized is preserved and retained until it is no longer required for-
(a) the investigation into the non-compliance or the offence described under section 60(1)(a);or
(b) the conclusion of any legal proceedings under a tax Act or criminal proceedings in which it is required to be used.
Section 28 (TAA) – Statement concerning accounts
28. Statement concerning accounts
(1) SARS may require a person who submits financial statements or accounts prepared by another person in support of that person’s submitted return, to submit a certificate or statement by the other person setting out the details of-
(a) the extent of the other person’s examination of the books of account and of the documents from which the books of account were written up; and
(b) whether or not the entries in those books and documents disclose the true nature of the transactions, receipts, accruals, payments or debits in so far as may be ascertained by that examination.
(2) A person who prepares financial statements or accounts for another person must, at the request of that other person, submit to that other person a copy of the certificate or statement referred to in subsection (1).
Section 35 (TAA) – Reportable arrangements
35. Reportable arrangements
(1) An “arrangement” is a reportable arrangement if a person is a “participant” in the “arrangement” and the “arrangement”–
(a) contains provisions in terms of which the calculation of interest as defined in section 24J of the Income Tax Act, finance costs, fees or any other charges is wholly or partly dependent on the assumptions relating to the tax treatment of that ‘arrangement’ (otherwise than by reason of any change in the provisions of a tax Act);
(b) has any of the characteristics contemplated in section 80C(2)(b) of the Income Tax Act, or substantially similar characteristics;
(c) gives rise to an amount that is or will be disclosed by any ‘participant’ in any year of assessment or over the term of the ‘arrangement’ as-
(i) a deduction for purposes of the Income Tax Act but not as an expense for purposes of ‘financial reporting standards’; or
(ii) revenue for purposes of ‘financial reporting standards’ but not as gross income for purposes of the Income Tax Act;
(d) does not result in a reasonable expectation of a ‘pre-tax profit’ for any ‘participant’; or
(e) results in a reasonable expectation of a ‘pre-tax profit’ for any ‘participant’ that is less than the value of that ‘tax benefit’ to that ‘participant’ if both are discounted to a present value at the end of the first year of assessment when that ‘tax benefit’ is or will be derived or is assumed to be derived, using consistent assumptions and a reasonable discount rate for that ‘participant’.
(2) An “arrangement” is a “reportable arrangement” if the Commissioner has listed the “arrangement” in a public notice.
Section 48 (TAA) – Field audit or criminal investigation
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
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
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
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
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.