Category: Tax Administration Act No. 28 of 2011

Section 190 (TAA) – Refunds of excess payments

Posted on by admin_kmos

190.    Refunds of excess payments

(1)     SARS must pay a refund if a person is entitled to a refund, including interest thereon under section 188(3)(a), of-

[Words preceding paragraph (a) substituted by section 60 of Act 23 of 2015 effective on 1 October 2012]

(a)     an amount properly refundable under a tax Act and if so reflected in an assessment; or

(b)     the amount erroneously paid in respect of an assessment in excess of the amount payable in terms of the assessment.

(2)     SARS need not authorise a refund as referred to in subsection (1) until such time that a verification, inspection, audit or criminal investigation of the refund in accordance with Chapter 5 has been finalised.

[Subsection (2) substituted by section 34(a) of Act 24 of 2020]

(3)     SARS must authorise the payment of a refund before the finalisation of the verification, inspection, audit or criminal investigation if security in a form acceptable to a senior SARS official is provided by the taxpayer.

[Subsection (3) substituted by section 34(b) of Act 24 of 2020]

(4)      An amount under subsection (1)(b) is regarded as a payment to the National Revenue Fund unless a refund is made in the case of—

(a)     an assessment by SARS, within three years from the later of the date of the assessment or the erroneous payment;

[Paragraph (a) amended by section 21(a) of Act 22 of 2018]

(b)     self-assessment, within five years from the later of the date the return had to be submitted or, if no return is required, payment had to be made in terms of the relevant tax Act or the erroneous payment was made; or

[Paragraph (b) amended by section 21(b) of Act 22 of 2018]

(c)     an erroneous payment claimed by a taxpayer within the period referred to in paragraph (a) or (b), but not paid by SARS within the period.

[Paragraph (c) added by section 21(c) of Act 22 of 2018]

[Subsection (4) substituted by section 53 of Act 44 of 2014 and by section 60(1)(b) of Act 23 of 2015]

(5)     If SARS pays to a person by way of a refund any amount which is not properly payable to the person under a tax Act, the amount, including interest thereon under section 187(1), is regarded as an outstanding tax debt from the date on which it is paid to the person.

[Subsection (5) substituted by section 71 of Act 39 of 2013 effective on 1 October 2012 and by section 60 of Act 23 of 2015 effective on 1 October 2012]

(5A)  If a person who carries on the ‘business of a bank’ as defined in the Banks Act, 1990 (Act No. 94 of 1990), holds an account on behalf of a client into which an amount referred to in subsection (5) is deposited, reasonably suspects that the payment of the amount is related to a tax offence, the person must immediately report the suspicion to SARS in the prescribed form and manner and not proceed with the carrying out of any transaction in respect of the amount for a period not exceeding two business days unless-

(a)     SARS or a High Court directs otherwise; or

(b)     SARS issues a notice under section 179.

[Subsection (5A) inserted by section 60 of Act 23 of 2015 and substituted by section 28 of Act 13 of 2017 effective on 18 December 2017]

(6)     A decision not to authorise a refund under subsection (1)(b) is subject to objection and appeal.

[Subsection (6) substituted by section 60 of Act 23 of 2015 effective on 8 January 2016]

Section 198 (TAA) – Tax debt irrecoverable at law

Posted on by admin_kmos

198.    Tax debt irrecoverable at law

 

(1)     A tax debt is irrecoverable at law if-

 

(a)     it cannot be recovered by action and judgment of a court; or

 

(b)     it is owed by a ‘debtor’ that is in liquidation or sequestration and it represents the balance outstanding after notice is given by the liquidator or trustee that no further dividend is to be paid or a final dividend has been paid to the creditors of the estate; or

 

(c)     it is owed by a ‘debtor’ that is subject to a business rescue plan referred to in Part D of Chapter 6 of the ‘Companies Act’, to the extent that it is not enforceable in terms of section 154 of that Act.

 

(2)     A tax debt is not irrecoverable at law if SARS has not first explored action against or recovery from the assets of the persons who may be liable for the debt under Part D of Chapter 11.

Section 199 (TAA) – Procedure for writing off tax debt

Posted on by admin_kmos

199.    Procedure for writing off tax debt

 

(1)     Before deciding to ‘write off’ a tax debt, a senior SARS official must-

 

(a)     determine whether there are any other tax debts owing to SARS by the ‘debtor’;

 

(b)     reconcile amounts owed by and to the ‘debtor’, including penalties, interest and costs;

 

(c)     obtain a breakdown of the tax debt and the periods to which the outstanding amounts relate; and

 

(d)     document the history of the recovery process and the reasons for deciding to ‘write off’ the tax debt.

 

(2)     In deciding whether to support a business rescue plan referred to in Part D of Chapter 6 of the ‘Companies Act’ or ‘compromise’ made to creditors under section 155 of the ‘Companies Act’ a senior SARS official must, in addition to considering the information as referred to in section 150 or 155 of that Act, take into account the information and aspects covered in the provisions of sections 200, 201(1), 202 and 203 with the necessary changes.

Section 218 (TAA) – Remittance of penalty in exceptional circumstances

Posted on by admin_kmos

218.    Remittance of penalty in exceptional circumstances

 

(1)     SARS must, upon receipt of a ‘remittance request’, remit the ‘penalty’ or if applicable a portion thereof, if SARS is satisfied that one or more of the circumstances referred to in subsection (2) rendered the person on whom the ‘penalty’ was imposed incapable of complying with the relevant obligation under the relevant tax Act.

 

(2)     The circumstances referred to in subsection (1) are limited to-

 

(a)     a natural or human-made disaster;

 

(b)     a civil disturbance or disruption in services;

 

(c)     a serious illness or accident;

 

(d)     serious emotional or mental distress;

 

(e)     any of the following acts by SARS:

 

(i)      a capturing error;

 

(ii)     a processing delay;

 

(iii)    provision of incorrect information in an official publication or media release issued by the Commissioner;

 

(iv)    delay in providing information to any person; or

 

(v)     failure by SARS to provide sufficient time for an adequate response to a request for information by SARS;

 

(f)      serious financial hardship, such as-

 

(i)      in the case of an individual, lack of basic living requirements; or

 

(ii)     in the case of a business, an immediate danger that the continuity of business operations and the continued employment of its employees are jeopardised; or

 

(g)     any other circumstance of analogous seriousness.

“Default” definition of section 225 of TAA

Posted on by admin_kmos

“default” means the submission of inaccurate or incomplete information to SARS, or the failure to submit information or the adoption of a “tax position”, where such submission, non-submission, or adoption resulted in an understatement.

[Definition of “default” substituted by section 64 of Act 23 of 2015 effective on 8 January 2016]