27. Other returns required
(1) A senior SARS official may require a person to submit further or more detailed returns regarding any matter for which a return under section 25 or 26 is required or prescribed by a tax Act.
(2) A person required under subsection (1) to submit a return must do so in the prescribed form and manner and the return must contain the information prescribed by the official and must be a full and true return.
‘tax benefit’ means the avoidance, postponement, reduction or evasion of a liability for tax.
28. Statement concerning accounts
(1) SARS may require a person who submits financial statements or accounts prepared by another person in support of that person’s submitted return, to submit a certificate or statement by the other person setting out the details of-
(a) the extent of the other person’s examination of the books of account and of the documents from which the books of account were written up; and
(b) whether or not the entries in those books and documents disclose the true nature of the transactions, receipts, accruals, payments or debits in so far as may be ascertained by that examination.
(2) A person who prepares financial statements or accounts for another person must, at the request of that other person, submit to that other person a copy of the certificate or statement referred to in subsection (1).
35. Reportable arrangements
(1) An “arrangement” is a reportable arrangement if a person is a “participant” in the “arrangement” and the “arrangement”–
(a) contains provisions in terms of which the calculation of interest as defined in section 24J of the Income Tax Act, finance costs, fees or any other charges is wholly or partly dependent on the assumptions relating to the tax treatment of that ‘arrangement’ (otherwise than by reason of any change in the provisions of a tax Act);
(b) has any of the characteristics contemplated in section 80C(2)(b) of the Income Tax Act, or substantially similar characteristics;
(c) gives rise to an amount that is or will be disclosed by any ‘participant’ in any year of assessment or over the term of the ‘arrangement’ as-
(i) a deduction for purposes of the Income Tax Act but not as an expense for purposes of ‘financial reporting standards’; or
(ii) revenue for purposes of ‘financial reporting standards’ but not as gross income for purposes of the Income Tax Act;
(d) does not result in a reasonable expectation of a ‘pre-tax profit’ for any ‘participant’; or
(e) results in a reasonable expectation of a ‘pre-tax profit’ for any ‘participant’ that is less than the value of that ‘tax benefit’ to that ‘participant’ if both are discounted to a present value at the end of the first year of assessment when that ‘tax benefit’ is or will be derived or is assumed to be derived, using consistent assumptions and a reasonable discount rate for that ‘participant’.
(2) An “arrangement” is a “reportable arrangement” if the Commissioner has listed the “arrangement” in a public notice.
29. Duty to keep records
(1) A person must keep the records, books of account or documents that-
(a) enable the person to observe the requirements of a tax Act;
(b) are specifically required under a tax Act or by the Commissioner by public notice; and
(c) enable SARS to be satisfied that the person has observed these requirements.
(2) The requirements of this Act to keep records, books of account or documents for a tax period apply to a person who-
(a) has submitted a return for the tax period;
(b) is required to submit a return for the tax period and has not submitted a return for the tax period; or
(c) is not required to submit a return but has, during the tax period, received income, has a capital gain or capital loss, or engaged in any other activity that is subject to tax or would be subject to tax but for the application of a threshold or exemption.
(3) Records, books of account or documents need not be retained by the person described in-
(a) subsection (2)(a), after a period of five years from the date of the submission of the return; and
(b) subsection (2)(c), after a period of five years from the end of the relevant tax period.
36. Excluded arrangements
(1) An ‘arrangement’ is an excluded ‘arrangement’ if it is-
(a) a debt in terms of which-
(i) the borrower receives or will receive an amount of cash and agrees to repay at least the same amount of cash to the lender at a determinable future date; or
(ii) the borrower receives or will receive a fungible asset and agrees to return an asset of the same kind and of the same or equivalent quantity and quality to the lender at a determinable future date;
(b) a lease;
(c) a transaction undertaken through an exchange regulated in terms of the Financial Markets Act, 2012 (Act 19 of 2012); or
[Paragraph (c) substituted by section 40 of Act 23 of 2015]
(d) a transaction in participatory interests in a scheme regulated in terms of the Collective Investment Schemes Control Act, 2002 (Act No. 45 of 2002).
(2) Subsection (1) applies only to an ‘arrangement’ that-
(a) is undertaken on a stand-alone basis and is not directly or indirectly connected to any other ‘arrangement’ (whether entered into between the same or different parties); or
(b) would have qualified as having been undertaken on a stand-alone basis as required by paragraph (a), were it not for a connected ‘arrangement’ that is entered into for the sole purpose of providing security and if no ‘tax benefit’ is obtained or enhanced by virtue of the security ‘arrangement’.
(3) Subsection (1) does not apply to an ‘arrangement’ that is entered into-
(a) with the main purpose or one of its main purposes of obtaining or enhancing a ‘tax benefit’; or
(b) in a specific manner or form that enhances or will enhance a ‘tax benefit’.
(4) The Commissioner may determine an “arrangement” to be an excluded “arrangement” by public notice.
30. Form of records kept or retained
(1) The records, books of account, and documents referred to in section 29, must be kept or retained-
(a) in their original form in an orderly fashion and in a safe place;
(b) in the form, including electronic form, as may be prescribed by the Commissioner in a public notice; or
(c) in a form specifically authorised by a senior SARS official in terms of subsection (2).
(2) A senior SARS official may, subject to the conditions as the official may determine, authorise the retention of information contained in records, books of account or documents referred to in section 29 in a form acceptable to the official.
37. Disclosure obligation
(1) The information referred to in section 38 in respect of a “reportable arrangement” must be disclosed by a person who-
(a) is a “participant” in an “arrangement” on the date on which it qualifies as a “reportable arrangement”, within 45 business days after that date; or
(b) becomes a “participant” in an “arrangement” after the date on which it qualifies as a “reportable arrangement”, within 45 business days after becoming a “participant”.
(2) ……….
(3) A “participant” need not disclose the information if the “participant” obtains a written statement from any other “participant” that the other “participant” has disclosed the “reportable arrangement”.
(4) ……….
(5) SARS may grant extension for disclosure for a further 45 business days, if reasonable grounds exist for the extension.
31. Inspection of records
The records, books of account and documents referred to in section 29 whether in the form referred to in section 30(1) or in a form authorised under section 30(2), must at all reasonable times during the required periods under section 29, be open for inspection by a SARS official in the Republic for the purpose of-
(a) determining compliance with the requirements of sections 29 and 30; or
(b) an inspection, audit or investigation under Chapter 5.
38. Information to be submitted
The following information in relation to a “reportable arrangement”, must be submitted in the prescribed form and manner and by the date specified:
(a) a detailed description of all its steps and key features, including, in the case of an ‘arrangement’ that is a step or part of a larger ‘arrangement’, all the steps and key features of the larger ‘arrangement’;
(b) a detailed description of the assumed ‘tax benefits’ for all ‘participants’, including, but not limited to, tax deductions and deferred income;
(c) the names, registration numbers, and registered addresses of all ‘participants’;
(d) a list of all its agreements; and
(e) any financial model that embodies its projected tax treatment.