Category: Tax Administration Act No. 28 of 2011

Section 84 (TAA) – Rulings rendered void

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84.    Rulings rendered void

 

(1)     A ‘binding private ruling’ or ‘binding class ruling’ is void ab initio if-

 

(a)     the ‘proposed transaction’ as described in the ruling is materially different from the ‘transaction’ actually carried out;

 

(b)     there is fraud, misrepresentation or non-disclosure of a material fact; or

 

(c)     an assumption made or condition imposed by SARS is not satisfied or carried out.

 

(2)     For purposes of this section, a fact described in subsection (1) is considered material if it would have resulted in a different ruling had SARS been aware of it when the original ruling was made.

Section 99 (TAA) – Period of limitations for issuance of assessments

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99.    Period of limitations for issuance of assessments

(1)     An assessment may not be made in terms of this Chapter-

[Words preceding paragraph (a) substituted by section 51 of Act 23 of 2015 effective on 8 January 2016]

(a)     three years after the date of assessment of an original assessment by SARS;

(b)     in the case of self-assessment for which a return is required, five years after the date of assessment of an original assessment-

(i)      by way of self-assessment by the taxpayer; or

(ii)     if no return is received, by SARS;

(c)     in the case of a self-assessment for which no return is required, after the expiration of five years from the-

(i)      date of the last payment of the tax for the tax period; or

(ii)     effective date, if no payment was made in respect of the tax for the tax period;

(d)     in the case of-

(i)      an additional assessment if the-

(aa)   amount which should have been assessed to tax under the preceding assessment was, in accordance with the practice generally prevailing at the date of the preceeding  assessment, not assessed to tax; or

(bb)   full amount of tax which should have been assessed under the preceding assessment was, in accordance with the practice, not assessed;

(ii)     a reduced assessment, if the preceding assessment was made in accordance with the practice generally prevailing at the date of that assessment; or

(iii)    a tax for which no return is required, if the payment was made in accordance with the practice generally prevailing at the date of that payment; or

(e)     in respect of a dispute that has been resolved under Chapter 9.

(2)     Subsection (1) does not apply to the extent that-

(a)     in the case of assessment by SARS, the fact that the full amount of tax chargeable was not assessed, was due to-

(i)      fraud;

(ii)     misrepresentation; or

(iii)    non-disclosure of material facts;

(b)     in the case of self-assessment, the fact that the full amount of tax chargeable was not assessed, was due to-

(i)      fraud;

(ii)     intentional or negligent misrepresentation;

(iii)    intentional or negligent non-disclosure of material facts; or

(iv)    the failure to submit a return or, if no return is required, the failure to make the required payment of tax;

(c)     SARS and the taxpayer so agree prior to the expiry of the limitations period;

[Paragraph (c) amended by section 51 of Act 23 of 2015 effective on 8 January 2016]

(d)     it is necessary to give effect to-

(i)      the resolution of a dispute under Chapter 9; or

[Subparagraph (i) amended by section 55 of Act 16 of 2016 effective on 19 January 2017]

(ii)     ……….

[Subparagraph (ii) deleted by section 55 of Act 16 of 2016 effective on 19 January 2017]

(iii)    an assessment referred to in section 93(1)(d) if SARS becomes aware of the error referred to in that subsection before expiry of the period for the assessment under subsection (1); or

[Paragraph (d) amended by section 47 of Act 39 of 2013 effective on 1 October 2012, substituted by section 51 of Act 23 of 2015 effective on 8 January 2016]

(iv)    a reduced or additional assessment under section 95(6); or

[Subparagraph (iv) inserted by section 20 of Act 21 of 2021]

(e)     SARS receives a request for a reduced assessment under section 93(1)(e).

[Paragraph (e) added by section 51 of Act 23 of 2015 effective on 8 January 2016]

(3)     The Commissioner may, by prior notice of at least 30 days to the taxpayer, extend a period under subsection (1) or an extended period under this section, before the expiry thereof, by a period approximate to a delay arising from:

(a)     failure by a taxpayer to provide all the relevant material requested within the period under section 46(1) or the extended period under section 46(5); or

(b)     resolving an information entitlement dispute, including legal proceedings.

[Subsection (3) added by section 51 of Act 23 of 2015 effective on 8 January 2016]

(4)     The Commissioner may, by prior notice of at least 60 days to the taxpayer, extend a period under subsection (1), before the expiry thereof, by three years in the case of an assessment by SARS or two years in the case of self-assessment, where an audit or investigation under Chapter 5 relates to-

(i)      the application of the doctrine of substance over form;

(ii)     the application of Part IIA of Chapter III of the Income Tax Act, section 73 of the Value-Added Tax Act or any other general anti-avoidance provision under a tax Act;

(iii)    the taxation of hybrid entities or hybrid instruments; or

(iv)    section 31 of the Income Tax Act.

[Subsection (4) added by section 51 of Act 23 of 2015 effective on 8 January 2016]

Section 85 (TAA) – Subsequent changes in tax law

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85.    Subsequent changes in tax law

 

(1)     Despite any provision to the contrary contained in a tax Act, an ‘advance ruling’ ceases to be effective if-

 

(a)     a provision of the tax Act that was the subject of the ‘advance ruling’ is repealed or amended in a manner that materially affects the ‘advance ruling’, in which case the ‘advance ruling’ will cease to be effective from the date that the repeal or amendment is effective; or

 

(b)     a court overturns or modifies an interpretation of the tax Act on which the ‘advance ruling’ is based, in which case the ‘advance ruling’ will cease to be effective from the date of judgment unless-

 

(i)      the decision is under appeal;

 

(ii)     the decision is fact-specific and the general interpretation upon which the ‘advance ruling’ was based is unaffected; or

 

(iii)    the reference to the interpretation upon which the ‘advance ruling’ was based was obiter dicta.

 

(2)     An ‘advance ruling’ ceases to be effective upon the occurrence of any of the circumstances described in subsection (1), whether or not SARS publishes a notice of withdrawal or modification.

Section 100 (TAA) – Finality of assessment or decision

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100.    Finality of assessment or decision

(1)     An assessment or a decision referred to in section 104(2) is final if, in relation to the assessment or decision-

(a)     it is an assessment described-

(i)      in section 95(1)(a) or (c), and no return or response described in section 95(6) has been received by SARS; or

[Subparagraph (i) substituted by section 30 of Act 24 of 2020]

(ii)     in section 95(3);

(b)     no objection has been made, or an objection has been withdrawn;

(c)     after the decision of an objection, no notice of appeal has been filed or a notice has been filed and is withdrawn;

[Paragraph (c) substituted by section 33 of Act 33 of 2019]

(d)     the dispute has been settled under Part F of Chapter 9;

(e)     an appeal has been determined by the tax board and there is no referral to the tax court under section 115;

(f)      an appeal has been determined by the tax court and there is no right of further appeal; or

(g)     an appeal has been determined by a higher court and there is no right of further appeal.

(2)     Subsection (1) does not prevent SARS from making an additional assessment, but in respect of an amount of tax that has been dealt with in a disputed assessment referred to in-

(a)     subsection (1)(d), (e) and (f), if the relevant period under section 99(1)(a), (b) or (c) has expired, SARS may only make an additional assessment under the circumstances referred to in section 99(2)(a) and (b); and

[Paragraph (a) substituted by section 56 of Act 16 of 2016 effective on 19 January 2017]

(b)     subsection (1)(g), SARS may not make an additional assessment.

Section 86 (TAA) – Withdrawal or modification of advance rulings

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86.    Withdrawal or modification of advance rulings

(1)     SARS may withdraw or modify an ‘advance ruling’ at any time.

(2)     If the ‘advance ruling’ is a ‘binding private ruling’ or ‘binding class ruling’, SARS must first provide the ‘applicant’ with notice of the proposed withdrawal or modification and a reasonable opportunity to make representations prior to the decision whether to withdraw or modify the ‘advance ruling’.

[Subsection (2) substituted by section 26 of Act 24 of 2020]

(3)     SARS must specify the date the decision to withdraw or modify the ‘advance ruling’ becomes effective, which date may not be earlier than the date-

(a)     the decision is delivered to an ‘applicant’, unless the circumstances in subsection (4) apply; or

(b)     in the case of a ‘binding general ruling’, the decision is published.

(4)     SARS may withdraw or modify a ‘binding private ruling’ or a ‘binding class ruling’ retrospectively if the ruling was made in error and if-

(a)     the ‘applicant’ or ‘class member’ has not yet commenced the ‘proposed transaction’ or has not yet incurred significant costs in respect of the arrangement;

(b)     a person other than the ‘applicant’ or ‘class member’ will suffer significant tax disadvantage if the ruling is not withdrawn or modified retrospectively and the ‘applicant’ will suffer comparatively less if the ruling is withdrawn or modified retrospectively; or

(c)     the effect of the ruling will materially erode the South African tax base and it is in the public interest to withdraw or modify the ruling retrospectively.

“Class” definition of section 75 of TAA

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‘class’ means-

 

(a)     shareholders, members, beneficiaries or the like in respect of a company, association, pension fund, trust, or the like; or

 

(b)     a group of persons, that may be unrelated and-

 

(i)      are similarly affected by the application of a tax Act to a ‘proposed transaction’; and

 

(ii)     agree to be represented by an ‘applicant’;

Section 87 (TAA) – Publication of advance rulings

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87.    Publication of advance rulings

 

(1)     A person applying for a ‘binding private ruling’ or ‘binding class ruling’ must consent to the publication of the ruling in accordance with this section.

 

(2)     A ‘binding private ruling’ or ‘binding class ruling’ must be published by SARS for general information in the manner and in the form that the Commissioner may prescribe, but without revealing the identity of an ‘applicant’, ‘class member’ or other person identified or referred to in the ruling.

 

(3)     Prior to publication, SARS must provide the ‘applicant’ with a draft copy of the edited ruling for review and comment.

 

(4)     SARS must consider, prior to publication, any comments and proposed edits and deletions submitted by the ‘applicant’, but is not required to accept them.

 

(5)     An ‘applicant’ for a ‘binding class ruling’ may consent in writing to the inclusion of information identifying it or the ‘proposed transaction’ in order to facilitate communication with the ‘class members’.

 

(6)     The application or interpretation of the relevant tax Act to a ‘transaction’ does not constitute information that may reveal the identity of an ‘applicant’, ‘class member’ or other person identified or referred to in the ruling.

 

(7)     SARS must treat the publication of the withdrawal or modification of a ‘binding private ruling’ or ‘binding class ruling’ in the same manner and subject to the same requirements as the publication of the original ruling.

 

(8)     Subsection (2) does not-

 

(a)     require the publication of a ruling that is materially the same as a ruling already published; or

 

(b)     apply to a ruling that has been withdrawn before SARS has had occasion to publish it.

 

(9)     If an ‘advance ruling’ has been published, notice of the withdrawal or modification thereof must be published in the manner and media as the Commissioner may deem appropriate.