‘application’ means an application for a ‘binding private ruling’ or a ‘binding class ruling’;
Category: Chapter 7 – Advance rulings (TAA)
Section 82 (TAA) – Binding effect of advance rulings
82. Binding effect of advance rulings
(1) If an ‘advance ruling’ applies to a person in accordance with section 83, then SARS must interpret or apply the applicable tax Act to the person in accordance with the ruling.
(2) An ‘advance ruling’ does not have ‘binding effect’ upon SARS in respect of a person unless it applies to the person in accordance with section 83.
(3) A ‘binding general ruling’ may be cited by SARS or a person in any proceedings, including court proceedings.
(4) A ‘binding private ruling’ or ‘binding class ruling’ may not be cited in any proceeding, including court proceedings, other than a proceeding involving an ‘applicant’ or a ‘class member’, as the case may be.
(5) A publication or other written statement issued by SARS does not have ‘binding effect’ unless it is an ‘advance ruling’.
“Binding class ruling” definition of section 75 of TAA
‘binding class ruling’ means a written statement issued by SARS regarding the application of a tax Act to a specific ‘class’ of persons in respect of a ‘proposed transaction’;
Section 83 (TAA) – Applicability of advance rulings
83. Applicability of advance rulings
A ‘binding private ruling’ or ‘binding class ruling’ applies to a person only if-
(a) the provision or provisions of the Act at issue are the subject of the ‘advance ruling’;
(b) the person’s set of facts or ‘transaction’ are the same as the particular set of facts or ‘transaction’ specified in the ruling;
(c) the person’s set of facts or ‘transaction’ falls entirely within the effective period of the ruling;
(d) any assumptions made or conditions imposed by SARS in connection with the validity of the ruling have been satisfied or carried out;
(e) in the case of a ‘binding private ruling’, the person is an ‘applicant’ identified in the ruling; and
(f) in the case of a ‘binding class ruling’, the person is a ‘class member’ identified in the ruling.
“Binding effect” definition of section 75 of TAA
‘binding effect’ means the requirement that SARS interpret or apply the applicable tax Act in accordance with an ‘advance ruling’ under section 82;
Section 84 (TAA) – Rulings rendered void
84. Rulings rendered void
(1) A ‘binding private ruling’ or ‘binding class ruling’ is void ab initio if-
(a) the ‘proposed transaction’ as described in the ruling is materially different from the ‘transaction’ actually carried out;
(b) there is fraud, misrepresentation or non-disclosure of a material fact; or
(c) an assumption made or condition imposed by SARS is not satisfied or carried out.
(2) For purposes of this section, a fact described in subsection (1) is considered material if it would have resulted in a different ruling had SARS been aware of it when the original ruling was made.
“Binding general ruling” definition of section 75 of TAA
‘binding general ruling’ means a written statement issued by a senior SARS official under section 89 regarding the interpretation of a tax Act or the application of a tax Act to the stated facts and circumstances;
Section 85 (TAA) – Subsequent changes in tax law
85. Subsequent changes in tax law
(1) Despite any provision to the contrary contained in a tax Act, an ‘advance ruling’ ceases to be effective if-
(a) a provision of the tax Act that was the subject of the ‘advance ruling’ is repealed or amended in a manner that materially affects the ‘advance ruling’, in which case the ‘advance ruling’ will cease to be effective from the date that the repeal or amendment is effective; or
(b) a court overturns or modifies an interpretation of the tax Act on which the ‘advance ruling’ is based, in which case the ‘advance ruling’ will cease to be effective from the date of judgment unless-
(i) the decision is under appeal;
(ii) the decision is fact-specific and the general interpretation upon which the ‘advance ruling’ was based is unaffected; or
(iii) the reference to the interpretation upon which the ‘advance ruling’ was based was obiter dicta.
(2) An ‘advance ruling’ ceases to be effective upon the occurrence of any of the circumstances described in subsection (1), whether or not SARS publishes a notice of withdrawal or modification.
“Binding private ruling” definition of section 75 of TAA
‘binding private ruling’ means a written statement issued by SARS regarding the application of a tax Act to one or more parties to a ‘proposed transaction’, in respect of the ‘transaction’;
Section 86 (TAA) – Withdrawal or modification of advance rulings
86. Withdrawal or modification of advance rulings
(1) SARS may withdraw or modify an ‘advance ruling’ at any time.
(2) If the ‘advance ruling’ is a ‘binding private ruling’ or ‘binding class ruling’, SARS must first provide the ‘applicant’ with notice of the proposed withdrawal or modification and a reasonable opportunity to make representations prior to the decision whether to withdraw or modify the ‘advance ruling’.
[Subsection (2) substituted by section 26 of Act 24 of 2020]
(3) SARS must specify the date the decision to withdraw or modify the ‘advance ruling’ becomes effective, which date may not be earlier than the date-
(a) the decision is delivered to an ‘applicant’, unless the circumstances in subsection (4) apply; or
(b) in the case of a ‘binding general ruling’, the decision is published.
(4) SARS may withdraw or modify a ‘binding private ruling’ or a ‘binding class ruling’ retrospectively if the ruling was made in error and if-
(a) the ‘applicant’ or ‘class member’ has not yet commenced the ‘proposed transaction’ or has not yet incurred significant costs in respect of the arrangement;
(b) a person other than the ‘applicant’ or ‘class member’ will suffer significant tax disadvantage if the ruling is not withdrawn or modified retrospectively and the ‘applicant’ will suffer comparatively less if the ruling is withdrawn or modified retrospectively; or
(c) the effect of the ruling will materially erode the South African tax base and it is in the public interest to withdraw or modify the ruling retrospectively.