Category: Tax Administration Act No. 28 of 2011

Section 166 (TAA) – Allocation of payments

Posted on by admin_kmos

166.    Allocation of payments

 

(1)     Despite anything to the contrary contained in a tax Act, SARS may allocate any payment made in terms of a tax Act against an amount of penalty or interest or the oldest amount of an outstanding tax debt at the time of the payment, other than amounts-

 

(a)     for which payment has been suspended under this Act; or

 

(b)     that are payable in terms of an instalment payment agreement under section 167.

 

(2)     SARS may apply the first-in-first-out principle described in subsection (1) in respect of a specific tax type or a group of tax types in the manner that may be prescribed by the Commissioner by public notice.

 

(3)     In the event that a payment in subsection (1) is insufficient to extinguish all tax debts of the same age, the amount of the payment may be allocated among these tax debts in the manner prescribed by the Commissioner by public notice.

 

(4)     The age of a tax debt for purposes of subsection (1) is determined according to the duration from the date the debt became payable in terms of the applicable Act.

Section 177 (TAA) – Institution of sequestration, liquidation or winding-up proceedings

Posted on by admin_kmos

177.    Institution of sequestration, liquidation or winding-up proceedings

(1)     A senior SARS official may authorise the institution of proceedings for the sequestration, liquidation or winding-up of a person for an outstanding tax debt.

[Subsection (1) substituted by section 65 of Act 39 of 2013 effective on 1 October 2012 and section 56 of Act 23 of 2015 effective on 8 January 2016]

(2)     SARS may institute the proceedings whether or not the person-

(a)     is present in the Republic; or

(b)     has assets in the Republic.

(3)     If the tax debt is subject to an objection or appeal under Chapter 9 or a further appeal against a decision by the tax court under section 129, the proceedings may only be instituted with leave of the court before which the proceedings are brought.

Section 189 (TAA) – Rate at which interest is charged

Posted on by admin_kmos

189.    Rate at which interest is charged

(1)     The rate at which interest is payable under section 187 is the prescribed rate.

(2)     In the case of interest payable with respect to refunds on assessment of provisional tax and employees’ tax for purposes of final assessment of income tax or of mineral and petroleum resources royalty paid for the relevant year of assessment, the rate payable by SARS is four percentage points below the prescribed rate.

[Subsection (2) substituted by section 33 of Act 24 of 2020]

(3)     The prescribed rate is the interest rate that the Minister may from time to time fix by notice in the Gazette under section 80(1)(b) of the Public Finance Management Act, 1999 (Act No. 1 of 1999).

(4)     If the Minister fixes a different interest rate referred to in subsection (3) the new rate comes into operation on the first day of the second month following the month in which the new rate becomes effective for purposes of the Public Finance Management Act, 1999.

(5)     If interest is payable under this Chapter and the rate at which the interest is payable has with effect from any date been altered, and the interest is payable in respect of any period or portion thereof which commenced before the said date, the interest to be determined in respect of-

(a)     the period or portion thereof which ended immediately before the said date; or

(b)     the portion of the period which was completed before the said date,

must be calculated as if the rate had not been altered.

Section 178 (TAA) – Jurisdiction of court in sequestration, liquidation or winding-up proceedings

Posted on by admin_kmos

178.    Jurisdiction of court in sequestration, liquidation or winding-up proceedings

 

Despite any law to the contrary, a proceeding referred to in section 177 may be instituted in any competent court and that court may grant an order that SARS requests, whether or not the taxpayer is registered, resident or domiciled, or has a place of effective management or a place of business, in the Republic.

Section 197 (TAA) – Permanent write off of tax debt

Posted on by admin_kmos

197.    Permanent write off of tax debt

 

(1)     A senior SARS official may authorise the permanent ‘write off’ of an amount of tax debt-

 

(a)     to the extent satisfied that the tax debt is irrecoverable at law as referred to in section 198; or

 

(b)     if the debt is ‘compromised’ in terms of Part D.

 

(2)     SARS must notify the ‘debtor’ in writing of the amount of tax debt ‘written off’.

Section 167 (TAA) – Instalment payment agreement

Posted on by admin_kmos

167.    Instalment payment agreement

 

(1)     A senior SARS official may enter into an agreement with a taxpayer in the prescribed form under which the taxpayer is allowed to pay a tax debt in one sum or in instalments, within the agreed period if satisfied that-

 

(a)     criteria or risks that may be prescribed by the Commissioner by public notice have been duly taken into consideration; and

 

(b)     the agreement facilitates the collection of the debt.

 

(2)     The agreement may contain such conditions as SARS deems necessary to secure collection of tax.

 

(3)     Except as provided in subsections (4) and (5), the agreement remains in effect for the term of the agreement.

 

(4)     SARS may terminate an instalment payment agreement if the taxpayer fails to pay an instalment or to otherwise comply with its terms and a payment prior to the termination of the agreement must be regarded as part payment of the tax debt.

 

(5)     A senior SARS official may modify or terminate an instalment payment agreement if satisfied that-

 

(a)     the collection of tax is in jeopardy;

 

(b)     the taxpayer has furnished materially incorrect information in applying for the agreement; or

 

(c)     the financial condition of the taxpayer has materially changed.

 

(6)     A termination or modification-

 

(a)     referred to in subsection (4) or (5)(a) takes effect as at the date stated in the notice of termination or modification sent to the taxpayer; and

 

(b)     referred to in subsection (5)(b) or (c) takes effect 21 business days after notice of the termination or modification is sent to the taxpayer.