Category: Tax Administration Act No. 28 of 2011

Section 103 (TAA) – Rules for dispute resolution

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103.    Rules for dispute resolution

 

(1)     The Minister may, after consultation with the Minister of Justice and Constitutional Development, by public notice make ‘rules’ governing the procedures to lodge an objection and appeal against an assessment or ‘decision’, and the conduct and hearing of an appeal before a tax board or tax court.

 

(2)     The ‘rules’ may provide for alternative dispute resolution procedures under which SARS and the person aggrieved by an assessment or ‘decision’ may resolve a dispute.

 

(3)     The Commissioner may prescribe the form of a document required to be completed and delivered under the “rules”.

Section 78 (TAA) – Private rulings and class rulings

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78.    Private rulings and class rulings

 

(1)     SARS may issue a ‘binding private ruling’ upon ‘application’ by a person in accordance with section 79.

 

(2)     SARS may issue a ‘binding class ruling’ upon ‘application’ by a person in accordance with section 79.

 

(3)     SARS may make a ‘binding private ruling’ or ‘binding class ruling’ subject to the conditions and assumptions as may be prescribed in the ruling.

 

(4)     SARS must issue the ruling to the ‘applicant’ at the address shown in the ‘application’ unless the ‘applicant’ provides other instructions, in writing, before the ruling is issued.

 

(5)     A ‘binding private ruling’ or ‘binding class ruling’ may be issued in the prescribed form and manner, must be signed by a senior SARS official and must contain the following:

 

(a)     a statement identifying it as a ‘binding private ruling’ or as a ‘binding class ruling’ made under this section;

 

(b)     the name, tax reference number (if applicable), and postal address of the ‘applicant’;

 

(c)     in the case of a ‘binding class ruling’, a list or a description of the affected ‘class members’;

 

(d)     the relevant statutory provisions or legal issues;

 

(e)     a description of the ‘proposed transaction’;

 

(f)      any assumptions made or conditions imposed by SARS in connection with the validity of the ruling;

 

(g)     the specific ruling made; and

 

(h)     the period for which the ruling is valid.

 

(6)     In the case of a ‘binding class ruling’, the ‘applicant’ alone is responsible for communicating with the affected ‘class members’ regarding the ‘application’ for the ruling, the issuance, withdrawal or modification of the ruling, or any other information or matter pertaining to the ruling.

Section 93 (TAA) – Reduced assessments

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93.    Reduced assessments

(1)     SARS may make a reduced assessment if-

(a)     the taxpayer successfully disputed the assessment under Chapter 9;

(b)     necessary to give effect to a settlement under Part F of Chapter 9;

(c)     necessary to give effect to a judgment pursuant to an appeal under Part E of Chapter 9 and there is no right of further appeal;

[Paragraph (c) amended by section 49 of Act 23 of 2015 effective on 8 January 2016]

(d)     SARS is satisfied that there is a readily apparent undisputed error in the assessment by-

(i)     SARS; or

(ii)     the taxpayer in a return;

[Paragraph (d) substituted by section 49 of Act 23 of 2015 and amended by section 18 of Act 21 of 2021]

(e)     a senior SARS official is satisfied that an assessment was based on-

(i)      the failure to submit a return or submission of an incorrect return by a third party under section 26 or by an employer under a tax Act;

(ii)     a processing error by SARS; or

(iii)    a return fraudulently submitted by a person not authorised by the taxpayer; or

[Paragraph (e) inserted by section 49 of Act 23 of 2015 and amended by section 28(a) of Act 24 of 2020. Subparagraph (iii) amended by section 18 of Act 21 of 2021]

(f)      the taxpayer in respect of whom an assessment has been issued under section 95(1), requests SARS to issue a reduced assessment under section 95(6).

[Paragraph (f) added by section 28(b) of Act 24 of 2020]

(2)     SARS may reduce an assessment despite the fact that no objection has been lodged or appeal noted.

Section 79 (TAA) – Applications for advance rulings

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79.    Applications for advance rulings

 

(1)     An ‘application’ must be made in the prescribed form and manner.

 

(2)     An ‘application’ for a ‘binding private ruling’ may be made by one person who is a party to a ‘proposed transaction’, or by two or more parties to a ‘proposed transaction’ as co-applicants, and if there is more than one ‘applicant’, each ‘applicant’ must join in designating one ‘applicant’ as the lead ‘applicant’ to represent the others.

 

(3)     An ‘application’ for a ‘binding class ruling’ may be made by a person on behalf of a ‘class’.

 

(4)     An ‘application’ must contain the following minimum information:

 

(a)     the ‘applicant’s’ name, applicable identification or taxpayer reference number, postal address, email address, and telephone number;

 

(b)     the name, postal address, email address and telephone number of the ‘applicant’s’ representative, if any;

 

(c)     a complete description of the ‘proposed transaction’ in respect of which the ruling is sought, including its financial implications;

 

(d)     a complete description of the impact the ‘proposed transaction’ may have upon the tax liability of the ‘applicant’ or any ‘class member’ or, if relevant, any connected person in relation to the ‘applicant’ or any ‘class member’;

 

(e)     a complete description of any ‘transaction’ entered into by the ‘applicant’ or ‘class member’ prior to submitting the ‘application’ or that may be undertaken after the completion of the ‘proposed transaction’ which may have a bearing on the tax consequences of the ‘proposed transaction’ or may be considered to be part of a series of ‘transactions’ involving the ‘proposed transaction’;

 

(f)      the proposed ruling being sought, including a draft of the ruling;

 

(g)     the relevant statutory provisions or legal issues;

 

(h)     the reasons why the ‘applicant’ believes that the proposed ruling should be granted;

 

(i)      a statement of the ‘applicant’s’ interpretation of the relevant statutory provisions or legal issues, as well as an analysis of relevant authorities either considered by the ‘applicant’ or of which the ‘applicant’ is aware, as to whether those authorities support or are contrary to the proposed ruling being sought;

 

(j)      a statement, to the best of the ‘applicant’s’ knowledge, as to whether the ruling requested is referred to in section 80;

 

(k)     a description of the information that the ‘applicant’ believes should be deleted from the final ruling before publication in order to protect the confidentiality of the ‘applicant’ or ‘class members’;

 

(l)      the ‘applicant’s’ consent to the publication of the ruling by SARS in accordance with section 87;

 

(m)    in the case of an ‘application’ for a ‘binding class ruling’-

 

(i)      a description of the ‘class members’; and

 

(ii)     the impact the ‘proposed transaction’ may have upon the tax liability of the ‘class members’ or, if relevant, any connected person in relation to the ‘applicant’ or to any ‘class member’.

 

(n)     a statement confirming that the ‘applicant’ complied with any registration requirements under a tax Act, with regard to any tax for which the ‘applicant’ is liable, unless the ‘application’ concerns a ruling to determine if the ‘applicant’ must register under a tax Act; and

 

(o)     a statement confirming that all returns required to be rendered by that ‘applicant’ in terms of a tax Act have been rendered and any tax has been paid or arrangements acceptable to SARS have been made for the submission of any outstanding returns or for the payment of any outstanding tax debt.

 

(5)     SARS may request additional information from an ‘applicant’ at any time.

 

(6)     An ‘application’ must be accompanied by the ‘application’ fee prescribed under section 81.

 

(7)     SARS must provide an ‘applicant’ with a reasonable opportunity to make representations if, based upon the ‘application’ and any additional information received, it appears that the content of the ruling to be made would differ materially from the proposed ruling sought by the ‘applicant’.

 

(8)     An ‘applicant’ may withdraw an ‘application’ for a ruling at any time.

 

(9)     A co-applicant to a ‘binding private ruling’ referred to in subsection (2) may withdraw from an ‘application’ at any time.

 

(10)   A withdrawal does not affect the liability to pay fees under section 81.

Section 94 (TAA) – Jeopardy assessments

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94.    Jeopardy assessments

 

(1)     SARS may make a jeopardy assessment in advance of the date on which the return is normally due, if the Commissioner is satisfied that it is required to secure the collection of tax that would otherwise be in jeopardy.

 

(2)     In addition to any rights under Chapter 9, a review application against an assessment made under this section may be made to the High Court on the grounds that-

 

(a)     its amount is excessive; or

 

(b)     circumstances that justify a jeopardy assessment do not exist.

 

(3)     In proceedings under subsection (2), SARS bears the burden of proving that the making of the jeopardy assessment is reasonable under the circumstances.

Section 104 (TAA) – Objection against assessment or decision

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104.    Objection against assessment or decision

(1)     A taxpayer who is aggrieved by an assessment made in respect of the taxpayer may object to the assessment.

(2)     The following decisions may be objected to and appealed against in the same manner as an assessment:

(a)     a decision under subsection (4) not to extend the period for lodging an objection;

(b)     a decision under section 107(2) not to extend the period for lodging an appeal; and

(c)     any other decision that may be objected to or appealed against under a tax Act.

(3)     A taxpayer entitled to object to an assessment or ‘decision’ must lodge an objection in the manner, under the terms, and within the period prescribed in the ‘rules’.

(4)     A senior SARS official may extend the period prescribed in the ‘rules’ within which objections must be made if satisfied that reasonable grounds exist for the delay in lodging the objection.

(5)     The period for objection must not be so extended-

(a)     for a period exceeding 30 business days, unless a senior SARS official is satisfied that exceptional circumstances exist which gave rise to the delay in lodging the objection;

[Paragraph (a) substituted by section 57 of Act 16 of 2016 effective on 19 January 2017]

(b)     if more than three years have lapsed from the date of assessment or the ‘decision’; or

(c)     if the grounds for objection are based wholly or mainly on a change in a practice generally prevailing which applied on the date of assessment or the ‘decision’.