‘tax’ means a tax as defined in section 1, excluding a penalty and interest, and will for purposes of this Part include an employment tax incentive as referred to in section 2(1) of the Employment Tax Incentive Act, 2013 (Act 26 of 2013);
[Definition of ‘tax’ substituted by section 26(1) of Act 16 of 2022 deemed effective on 1 September 2022, and applicable to any return, for purposes of paragraph 14(2) of the Fourth Schedule to the Income Tax Act, submitted or after that date]
206. Register of tax debts written off or compromised
(1) SARS must maintain a register of the tax debts ‘written off or ‘compromised’ in terms of this Chapter.
(2) The register referred to in subsection (1) must contain-
(a) the details of the ‘debtor’, including name, address and taxpayer reference number;
(b) the amount of the tax debt ‘written off’ or ‘compromised’ and the periods to which the tax debt relates; and
(c) the reason for ‘writing off’ or ‘compromising’ the tax debt.
213. Imposition of percentage based penalty
(1) If SARS is satisfied that an amount of tax was not paid as and when required under a tax Act, SARS must, in addition to any other “penalty” or interest for which a person may be liable, impose a “penalty” equal to the percentage of the amount of unpaid tax as prescribed in the tax Act.
[Subsection (1) substituted by section 63 of Act 23 of 2015 effective on 1 October 2012]
(2) In the event of a change to the amount of tax in respect of which a ‘penalty’ was imposed under subsection (1), the ‘penalty’ must be adjusted accordingly with effect from the date of the imposition of the ‘penalty’.
‘tax position’ means an assumption underlying one or more aspects of a tax return, including whether or not-
(a) an amount, transaction, event or item is taxable;
(b) an amount or item is deductible or may be set-off;
(c) a lower rate of tax than the maximum applicable to that class of taxpayer, transaction, event or item applies; or
(d) an amount qualifies as a reduction of tax payable; and
207. Reporting by Commissioner of tax debts written off or compromised
(1) The amount of tax debts ‘written off’ or ‘compromised’ during a financial year must be disclosed in the annual financial statements of SARS relating to administered revenue for that year.
(2) The Commissioner must on an annual basis provide to the Auditor-General and to the Minister a summary of the tax debts which were ‘written off’ or ‘compromised’ in whole or in part during the period covered by the summary, which must-
(a) be in a format which, subject to section 70(5), does not disclose the identity of the ‘debtor’ concerned;
(b) be submitted within 60 business days following the end of the fiscal year; and
(c) contain details of the number of tax debts “written off” or “compromised” and the amount of revenue forgone, which must be reflected in respect of main classes of taxpayers or sections of the public.
Part D
Procedure
“understatement” means any prejudice to SARS or the fiscus as a result of-
(a) failure to submit a return required under a tax Act or by the Commissioner;
[Paragraph (a) substituted by section 22 of Act 22 of 2018]
(b) an omission from a return;
(c) an incorrect statement in a return;
(d) if no return is required, the failure to pay the correct amount of “tax”; or
(e) an “impermissible avoidance arrangement.
[Definition of “understatement” amended by section 74 of Act 39 of 2013 and substituted by section 61 of Act 16 of 2016 effective on 19 January 2017]
CHAPTER 15
ADMINISTRATIVE NON-COMPLIANCE PENALTIES
214. Procedures for imposing penalty
(1) A ‘penalty’ imposed under Part B or C is imposed by way of a ‘penalty assessment’, and if a ‘penalty assessment’ is made, SARS must give notice of the assessment in the format as SARS may decide to the person, including the following:
(a) the non-compliance in respect of which the ‘penalty’ is assessed and its duration;
(b) the amount of the ‘penalty’ imposed;
(c) the date for paying the ‘penalty’;
(d) the automatic increase of the ‘penalty’; and
(e) a summary of procedures for requesting remittance of the ‘penalty’.
(2) A ‘penalty’ is due upon assessment and must be paid-
(a) on or before the date for payment stated in the notice of the ‘penalty assessment’; or
(b) where the ‘penalty assessment’ is made together with an assessment of tax, on or before the deadline for payment stated in the notice of the assessment for tax.
(3) SARS must give the taxpayer notice of an adjustment to the ‘penalty’ in accordance with section 211(2) or 213(2).
Part A
General