Category: Tax Administration Act No. 28 of 2011

Section 227 (TAA) – Requirements for valid voluntary disclosure

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227.    Requirements for valid voluntary disclosure

The requirements for a valid voluntary disclosure are that the disclosure must-

(a)     be voluntary;

(b)     involve a “default” which has not occurred within five years of the disclosure of a similar “default” by the applicant or a person referred to in section 226(3);

[Paragraph (b) substituted by section 66 of Act 23 of 2015 effective on 8 January 2016]

(c)     be full and complete in all material respects;

(d)     involve a behaviour referred to in column 2 of the understatement penalty  percentage table in section 223;

[Paragraph (d) substituted by section 66 of Act 23 of 2015 effective on 8 January 2016]

(e)     not result in a refund due by SARS; and

(f)      be made in the prescribed form and manner.

Section 202 (TAA) – Consideration of request to compromise tax debt

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202.    Consideration of request to compromise tax debt

 

(1)     In considering a request for a ‘compromise’, a senior SARS official must have regard to the extent that the ‘compromise’ may result in-

 

(a)     savings in the costs of collection;

 

(b)     collection at an earlier date than would otherwise be the case without the ‘compromise’;

 

(c)     collection of a greater amount than would otherwise have been recovered; or

 

(d)     the abandonment by the ‘debtor’ of some claim or right, which has a monetary value, arising under a tax Act, including existing or future tax benefits, such as carryovers of losses, deductions, credits and rebates.

 

(2)     In determining the position without the ‘compromise’, a senior SARS official must have regard to-

 

(a)     the value of the ‘debtor’s’ present assets;

 

(b)     future prospects of the ‘debtor’, including arrangements which have been implemented or are proposed which may have the effect of diverting income or assets that may otherwise accrue to or be acquired by the ‘debtor’ or a connected person in relation to the ‘debtor’;

 

(c)     past transactions of the ‘debtor’; and

 

(d)     the position of any connected person in relation to the ‘debtor’.

Section 203 (TAA) – Circumstances where not appropriate to compromise tax debt

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203.    Circumstances where not appropriate to compromise tax debt

 

A senior SARS official may not ‘compromise’ any amount of a tax debt under section 200 if-

 

(a)     the ‘debtor’ was a party to an agreement with SARS to ‘compromise’ an amount of tax debt within the period of three years immediately before the request for the ‘compromise’;

 

(b)     the tax affairs of the ‘debtor’ (other than the outstanding tax debt) are not up to date;

 

(c)     another creditor has communicated its intention to initiate or has initiated liquidation or sequestration proceedings;

 

(d)     the ‘compromise’ will prejudice other creditors (unless the affected creditors consent to the ‘compromise’) or if other creditors will be placed in a position of advantage relative to SARS;

 

(e)     it may adversely affect broader taxpayer compliance; or

 

(f)      the ‘debtor’ is a company or a trust and SARS has not first explored action against or recovery from the personal assets of the persons who may be liable for the debt under Part D of Chapter 11.

Section 210 (TAA) – Non-compliance subject to penalty

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210.    Non-compliance subject to penalty

(1)     If SARS is satisfied that non-compliance by a person referred to in subsection (2) exists, SARS must impose the appropriate ‘penalty’ in accordance with the Table in section 211.

(2)     Non-compliance is failure to comply with an obligation that is imposed by or under a tax Act and is listed in a public notice issued by the Commissioner, other than-

(a)     the failure to pay tax subject to a percentage based penalty under Part C;

(b)     non-compliance in respect of which an understatement penalty under Chapter 16 has been imposed; or

(c)     the failure to disclose information subject to a reportable arrangement or mandatory disclosure penalty under section 212.

[Section 210 substituted by section 70 of Act 21 of 2012. Paragraph (c) substituted by section 40 of Act 33 of 2019]

Section 229 (TAA) – Voluntary disclosure relief

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229.    Voluntary disclosure relief

Despite the provisions of a tax Act, SARS must, pursuant to the making of a valid voluntary disclosure by the applicant and the conclusion of the voluntary disclosure agreement under section 230–

[Words preceding paragraph (a) substituted by section 67 of Act 23 of 2015 effective on 8 January 2016]

(a)     not pursue criminal prosecution for a tax offence arising from the ‘default’;

(b)     grant the relief in respect of any understatement penalty to the extent referred to in column 5 or 6 of the understatement penalty percentage table in section 223; and

(c)     grant 100 per cent relief in respect of an administrative non-compliance penalty that was or may be imposed under Chapter 15 or a penalty imposed under a tax Act, excluding a penalty imposed under that Chapter or in terms of a tax Act for the late submission of a return.

[Paragraph (c) substituted by section 67 of Act 23 of 2015 effective on 8 January 2016]