158. Responsible third party
In this Act, responsible third party means a person who becomes otherwise liable for the tax liability of another person, other than as a representative taxpayer or as a withholding agent, whether in a personal or representative capacity.
Part E
Appeal against tax court decision
145. Circumstances where settlement is inappropriate
It is inappropriate and not to the best advantage of the State to ‘settle’ a ‘dispute’ if in the opinion of SARS-
(a) no circumstances envisaged in section 146 exist and-
(i) the action by the person concerned that relates to the ‘dispute’ constitutes intentional tax evasion or fraud;
(ii) the ‘settlement’ would be contrary to the law or a practice generally prevailing and no exceptional circumstances exist to justify a departure from the law or practice; or
(iii) the person concerned has not complied with the provisions of a tax Act and the non-compliance is of a serious nature;
(b) it is in the public interest to have judicial clarification of the issue and the case is appropriate for this purpose; or
(c) the pursuit of the matter through the courts will significantly promote taxpayer compliance with a tax Act and the case is suitable for this purpose.
159. Personal liability of responsible third party
A responsible third party is personally liable to the extent described in Part D of Chapter 11.
133. Appeal against decision of tax court
(1) The taxpayer or SARS may in the manner provided for in this Act appeal against a decision of the tax court under sections 129 and 130.
(2) An appeal against a decision of the tax court lies-
(a) to the full bench of the Provincial Division of the High Court which has jurisdiction in the area in which the tax court sitting is held; or
(b) to the Supreme Court of Appeal, without an intermediate appeal to the Provincial Division, if-
(i) the president of the tax court has granted leave under section 135; or
(ii) the appeal was heard by the tax court constituted under section 118(5).
146. Circumstances where settlement is appropriate
The Commissioner may, if it is to the best advantage of the state, ‘settle’ a ‘dispute’, in whole or in part, on a basis that is fair and equitable to both the person concerned and to SARS, having regard to-
(a) whether the ‘settlement’ would be in the interest of good management of the tax system, overall fairness, and the best use of SARS’ resources;
(b) SARS’ cost of litigation in comparison to the possible benefits with reference to the prospects of success in court;
[Paragraph (b) substituted by section 55 of Act 23 of 2015 effective on 8 January 2016]
(c) whether there are any-
(i) complex factual issues in contention; or
(ii) evidentiary difficulties,
which are sufficient to make the case problematic in outcome or unsuitable for resolution through the alternative ‘dispute’ resolution procedures or the courts;
(d) a situation in which a participant or a group of participants in a tax avoidance arrangement has accepted SARS’ position in the ‘dispute’, in which case the ‘settlement’ may be negotiated in an appropriate manner required to unwind existing structures and arrangements; or
(e) whether ‘settlement’ of the ‘dispute’ is a cost-effective way to promote compliance with a tax Act by the person concerned or a group of taxpayers.
160. Taxpayer’s right to recovery
[Heading of section 160 substituted by section 27 of Act 13 of 2017 effective on 18 December 2017]
(1) A representative taxpayer, withholding agent or responsible third party who, as such, pays a tax is entitled-
(a) to recover the amount so paid from the person on whose behalf it is paid; or
(b) to retain out of money or assets in that person’s possession or that may come to that person in that representative capacity, an amount equal to the amount so paid.
(2) Unless otherwise provided for in a tax Act, a taxpayer in respect of whom an amount has been paid to SARS by a withholding agent under a tax Act or by a responsible third party under section 179, is not entitled to recover from the withholding agent or responsible third party the amount so paid but is entitled to recover the amount of an unlawful or erroneous payment from SARS.
134. Notice of intention to appeal tax court decision
(1) A party who intends to lodge an appeal against a decision of the tax court (hereinafter in this Part referred to as the appellant) must, within 21 business days after the date of the notice by the ‘registrar’ notifying the parties of the tax court’s decision under section 131, or within a further period as the president of the tax court may on good cause shown allow, lodge with the ‘registrar’ and serve upon the opposite party or the opposite party’s legal practitioner or agent, a notice of intention to appeal against the decision.
[Subsection (1) substituted by section 36 of Act 33 of 2019]
(2) A notice of intention to appeal must state-
(a) in which division of the High Court the appellant wishes the appeal to be heard;
(b) whether the whole or only part of the judgment is to be appealed against (if in part only, which part), and the grounds of the intended appeal, indicating the findings of fact or rulings of law to be appealed against; and
(c) whether the appellant requires a transcript of the evidence given at the tax court’s hearing of the case in order to prepare the record on appeal (or if only a part of the evidence is required, which part).
(3) If the appellant is the taxpayer and requires a-
(a) transcript of the evidence or a part thereof from the ‘registrar’, the appellant must pay the fees prescribed by the Commissioner by public notice; or
(b) copy of the recording of the evidence or a part thereof from the ‘registrar’ for purposes of private transcription, the appellant must pay the fees prescribed by the Commissioner in the public notice.
(4) A fee paid under subsection (3) constitutes funds of SARS within the meaning of section 24 of the SARS Act.
147. Procedure for settlement
(1) A person participating in a ‘settlement’ procedure must disclose all relevant facts during the discussion phase of the process of ‘settling’ a ‘dispute’.
(2) A ‘settlement’ is conditional upon full disclosure of material facts known to the person concerned at the time of ‘settlement’.
(3) A dispute ‘settled’ in whole or in part must be evidenced by an agreement in writing between the parties in the prescribed format and must include details on-
(a) how each particular issue is ‘settled’;
(b) relevant undertakings by the parties;
(c) treatment of the issue in future years;
(d) withdrawal of objections and appeals; and
(e) arrangements for payment.
(4) The agreement must be signed by a senior SARS official.
(5) SARS must, if the ‘dispute’ is not ultimately ‘settled’, explain to the person concerned the further rights of objection and appeal.
(6) The agreement and terms of a ‘settlement’ agreement must remain confidential, unless their disclosure is authorised by law or SARS and the person concerned agree otherwise.
161. Security by taxpayer
(1) A senior SARS official may require security from a taxpayer to safeguard the collection of tax by SARS, if the taxpayer-
(a) is a representative taxpayer, withholding agent or responsible third party who was previously held liable in the taxpayer’s personal capacity under a tax Act;
(b) has been convicted of a tax offence;
(c) has frequently failed to pay amounts of tax due;
(d) has frequently failed to carry out other obligations imposed under any tax Act which constitutes non-compliance referred to in Chapter 15; or
(e) is under the management or control of a person who is or was a person contemplated in paragraphs (a) to (d).
(2) If security is required, SARS must by written notice to the taxpayer require the taxpayer to furnish to or deposit with SARS, within such period that SARS may allow, security for the payment of any tax which has or may become payable by the taxpayer in terms of a tax Act.
(3) The security must be of the nature, amount and form that the senior SARS official directs.
(4) If the security is in the form of cash deposit and the taxpayer fails to make such deposit, it may-
(a) be collected as if it were an outstanding tax debt of the taxpayer recoverable under this Act; or
(b) be set-off against any refund due to the taxpayer.
(5) A senior SARS official may, in the case of a taxpayer which is not a natural person and cannot provide the security required under subsection (1), require of any or all of the members, shareholders or trustees who control or are involved in the management of the taxpayer to enter into a contract of suretyship in respect of the taxpayer’s liability for tax which may arise from time to time.