CHAPTER 8
ASSESSMENTS
Category: Chapter 8 – Assessments (TAA)
Section 91 (TAA) – Original assessments
91. Original assessments
(1) If a tax Act requires a taxpayer to submit a return which does not incorporate a determination of the amount of a tax liability, SARS must make an original assessment based on the return submitted by the taxpayer or other information available or obtained in respect of the taxpayer.
(2) If a tax Act requires a taxpayer to submit a return which incorporates a determination of the amount of a tax liability, the submission of the return is an original self-assessment of the tax liability.
(3) If a tax Act requires a taxpayer to make a determination of the amount of a tax liability and no return is required, the payment of the amount of tax due is an original assessment.
(4) . . . . . .
[Subsection (4) substituted by section 32 of Act 33 of 2019 and deleted by section 27 of Act 24 of 2020]
(5) . . . . . .
[Subsection (5) substituted by section 58(a) of Act 21 of 2012 and deleted by section 27 of Act 24 of 2020]
(6) . . . . . .
[Subsection (6) added by section 58(b) of Act 21 of 2012 and deleted by section 27 of Act 24 of 2020]
Section 92 (TAA) – Additional assessments
92. Additional assessments
If at any time SARS is satisfied that an assessment does not reflect the correct application of a tax Act to the prejudice of SARS or the fiscus, SARS must make an additional assessment to correct the prejudice.
Section 93 (TAA) – Reduced assessments
93. Reduced assessments
(1) SARS may make a reduced assessment if-
(a) the taxpayer successfully disputed the assessment under Chapter 9;
(b) necessary to give effect to a settlement under Part F of Chapter 9;
(c) necessary to give effect to a judgment pursuant to an appeal under Part E of Chapter 9 and there is no right of further appeal;
[Paragraph (c) amended by section 49 of Act 23 of 2015 effective on 8 January 2016]
(d) SARS is satisfied that there is a readily apparent undisputed error in the assessment by-
(i) SARS; or
(ii) the taxpayer in a return;
[Paragraph (d) substituted by section 49 of Act 23 of 2015 and amended by section 18 of Act 21 of 2021]
(e) a senior SARS official is satisfied that an assessment was based on-
(i) the failure to submit a return or submission of an incorrect return by a third party under section 26 or by an employer under a tax Act;
(ii) a processing error by SARS; or
(iii) a return fraudulently submitted by a person not authorised by the taxpayer; or
[Paragraph (e) inserted by section 49 of Act 23 of 2015 and amended by section 28(a) of Act 24 of 2020. Subparagraph (iii) amended by section 18 of Act 21 of 2021]
(f) the taxpayer in respect of whom an assessment has been issued under section 95(1), requests SARS to issue a reduced assessment under section 95(6).
[Paragraph (f) added by section 28(b) of Act 24 of 2020]
(2) SARS may reduce an assessment despite the fact that no objection has been lodged or appeal noted.
Section 94 (TAA) – Jeopardy assessments
94. Jeopardy assessments
(1) SARS may make a jeopardy assessment in advance of the date on which the return is normally due, if the Commissioner is satisfied that it is required to secure the collection of tax that would otherwise be in jeopardy.
(2) In addition to any rights under Chapter 9, a review application against an assessment made under this section may be made to the High Court on the grounds that-
(a) its amount is excessive; or
(b) circumstances that justify a jeopardy assessment do not exist.
(3) In proceedings under subsection (2), SARS bears the burden of proving that the making of the jeopardy assessment is reasonable under the circumstances.
Section 95 (TAA) – Estimation of assessments
95. Estimation of assessments
(1) SARS may make an original, additional, reduced or jeopardy assessment based in whole or in part on an estimate, if the taxpayer—
(a) does not submit a return;
(b) submits a return or relevant material that is incorrect or inadequate; or
(c) does not submit a response to a request for relevant material under section 46, in relation to the taxpayer, after delivery of more than one request for such material.
[Subsection (1) substituted by section 29(a) of Act 24 of 2020]
(2) SARS must make the estimate based on information readily available to it.
(3) If the taxpayer is unable to submit an accurate return, a senior SARS official may agree in writing with the taxpayer as to the amount of tax chargeable and issue an assessment accordingly, which assessment is not subject to objection or appeal.
(4) The making of an assessment under subsection (1) does not detract from the obligation to submit a return or the relevant material.
[Subsection (4) added by section 29(b) of Act 24 of 2020]
(5) An assessment under subsection (1)(a) or (c) is only subject to objection and appeal if SARS decides not to make a reduced or additional assessment after the taxpayer submits the return or relevant material under subsection (6).
[Subsection (5) added by section 29(b) of Act 24 of 2020 and substituted by section 19(a) of Act 21 of 2021]
(6) The taxpayer in relation to whom the assessment under subsection (1)(a) or (c) has been issued may, within 40 business days from the date of assessment, or a longer period as the Commissioner may prescribe by public notice, request SARS to make a reduced or additional assessment by submitting a true and full return or the relevant material.
[Subsection (6) added by section 29(b) of Act 24 of 2020, substituted by section 19(b) of Act 21 of 2021 and by section 29(a) of Act 18 of 2023 deemed effective on 31 July 2023]
(7) If reasonable grounds for an extension are submitted by the taxpayer, a senior SARS official may extend the period referred to in subsection (6) within which the return or relevant material must be submitted, for a period not exceeding the relevant period referred to in section 99(1) or forty business days, whichever is the longest.
[Subsection (7) added by section 29(b) of Act 24 of 2020 and substituted by section 19(c) of Act 21 of 2021]
(8) If SARS decides not to make a reduced or additional assessment as requested under subsection (6), the date of the assessment made under subsection (1)(a) or (1)(c), for purposes of Chapter 9, is extended to the date of the written notice of the decision.
[Subsection (8) added by section 19(d) of Act 21 of 2021 and substituted by section 29(b) of Act 18 of 2023]
Section 96 (TAA) – Notice of assessment
96. Notice of assessment
(1) SARS must issue to the taxpayer assessed a notice of the assessment made by SARS stating-
(a) the name of the taxpayer;
(b) the taxpayer’s taxpayer reference number, or if one has not been allocated, any other form of identification;
(c) the date of the assessment;
(d) the amount of the assessment;
(e) the tax period in relation to which the assessment is made;
(f) the date for paying the amount assessed; and
(g) a summary of the procedures for lodging an objection to the assessment.
(2) In addition to the information provided in terms of subsection (1) SARS must give the person assessed-
(a) in the case of an assessment described in section 95 or an assessment that is not fully based on a return submitted by the taxpayer, a statement of the grounds for the assessment; and
(b) in the case of a jeopardy assessment, the grounds for believing that the tax would otherwise be in jeopardy.
Section 97 (TAA) – Recording of assessments
97. Recording of assessments
(1) The particulars of an assessment and the amount of tax payable thereon must be recorded and kept by SARS.
(2) A notice of assessment issued by SARS is regarded as made by a SARS official authorised to do so or duly issued by SARS, until proven to the contrary.
(3) The record of an assessment is not open to public inspection.
(4) The record of an assessment, including the return or records on which it was based, whether in electronic format or otherwise, may be destroyed by SARS after seven years from the date of assessment or the expiration of a further period that may be required-
(a) by the Auditor-General;
(b) as a result of the application of section 99(2)(c); or
(c) for purposes of a verification, audit or criminal investigation under Chapter 5 or a dispute under Chapter 9.
[Subsection (4) substituted by section 54 of Act 16 of 2016 effective on 19 January 2017]
Section 98 (TAA) – Withdrawal of assessments
98. Withdrawal of assessments
(1) SARS may, despite the fact that no objection has been lodged or appeal noted, withdraw an assessment which-
(a) was issued to the incorrect taxpayer;
(b) was issued in respect of the incorrect tax period; or
[Paragraph (b) amended by section 46 of Act 39 of 2013 effective on 1 October 2012 and section 50 of Act 23 of 2015 effective on 8 January 2016]
(c) was issued as a result of an incorrect payment allocation.
[Paragraph (c) amended by section 46 of Act 39 of 2013 effective on 1 October 2012 and section 50 of Act 23 of 2015 effective on 8 January 2016]
(d) ……….
[Paragraph (d) added by section 46 of Act 39 of 2013 effective on 1 October 2012, deleted by section 50 of Act 23 of 2015 effective on 8 January 2016]
(2) An assessment withdrawn under this section is regarded not to have been issued, unless a senior SARS official agrees in writing with the taxpayer as to the amount of tax properly chargeable for the relevant tax period and accordingly issues a revised original, additional or reduced assessment, as the case may be, which assessment is not subject to objection or appeal.
Section 99 (TAA) – Period of limitations for issuance of assessments
99. Period of limitations for issuance of assessments
(1) An assessment may not be made in terms of this Chapter-
[Words preceding paragraph (a) substituted by section 51 of Act 23 of 2015 effective on 8 January 2016]
(a) three years after the date of assessment of an original assessment by SARS;
(b) in the case of self-assessment for which a return is required, five years after the date of assessment of an original assessment-
(i) by way of self-assessment by the taxpayer; or
(ii) if no return is received, by SARS;
(c) in the case of a self-assessment for which no return is required, after the expiration of five years from the-
(i) date of the last payment of the tax for the tax period; or
(ii) effective date, if no payment was made in respect of the tax for the tax period;
(d) in the case of-
(i) an additional assessment if the-
(aa) amount which should have been assessed to tax under the preceding assessment was, in accordance with the practice generally prevailing at the date of the preceeding assessment, not assessed to tax; or
(bb) full amount of tax which should have been assessed under the preceding assessment was, in accordance with the practice, not assessed;
(ii) a reduced assessment, if the preceding assessment was made in accordance with the practice generally prevailing at the date of that assessment; or
(iii) a tax for which no return is required, if the payment was made in accordance with the practice generally prevailing at the date of that payment; or
(e) in respect of a dispute that has been resolved under Chapter 9.
(2) Subsection (1) does not apply to the extent that-
(a) in the case of assessment by SARS, the fact that the full amount of tax chargeable was not assessed, was due to-
(i) fraud;
(ii) misrepresentation; or
(iii) non-disclosure of material facts;
(b) in the case of self-assessment, the fact that the full amount of tax chargeable was not assessed, was due to-
(i) fraud;
(ii) intentional or negligent misrepresentation;
(iii) intentional or negligent non-disclosure of material facts; or
(iv) the failure to submit a return or, if no return is required, the failure to make the required payment of tax;
(c) SARS and the taxpayer so agree prior to the expiry of the limitations period;
[Paragraph (c) amended by section 51 of Act 23 of 2015 effective on 8 January 2016]
(d) it is necessary to give effect to-
(i) the resolution of a dispute under Chapter 9; or
[Subparagraph (i) amended by section 55 of Act 16 of 2016 effective on 19 January 2017]
(ii) ……….
[Subparagraph (ii) deleted by section 55 of Act 16 of 2016 effective on 19 January 2017]
(iii) an assessment referred to in section 93(1)(d) if SARS becomes aware of the error referred to in that subsection before expiry of the period for the assessment under subsection (1); or
[Paragraph (d) amended by section 47 of Act 39 of 2013 effective on 1 October 2012, substituted by section 51 of Act 23 of 2015 effective on 8 January 2016]
(iv) a reduced or additional assessment under section 95(6); or
[Subparagraph (iv) inserted by section 20 of Act 21 of 2021]
(e) SARS receives a request for a reduced assessment under section 93(1)(e).
[Paragraph (e) added by section 51 of Act 23 of 2015 effective on 8 January 2016]
(3) The Commissioner may, by prior notice of at least 30 days to the taxpayer, extend a period under subsection (1) or an extended period under this section, before the expiry thereof, by a period approximate to a delay arising from:
(a) failure by a taxpayer to provide all the relevant material requested within the period under section 46(1) or the extended period under section 46(5); or
(b) resolving an information entitlement dispute, including legal proceedings.
[Subsection (3) added by section 51 of Act 23 of 2015 effective on 8 January 2016]
(4) The Commissioner may, by prior notice of at least 60 days to the taxpayer, extend a period under subsection (1), before the expiry thereof, by three years in the case of an assessment by SARS or two years in the case of self-assessment, where an audit or investigation under Chapter 5 relates to-
(i) the application of the doctrine of substance over form;
(ii) the application of Part IIA of Chapter III of the Income Tax Act, section 73 of the Value-Added Tax Act or any other general anti-avoidance provision under a tax Act;
(iii) the taxation of hybrid entities or hybrid instruments; or
(iv) section 31 of the Income Tax Act.
[Subsection (4) added by section 51 of Act 23 of 2015 effective on 8 January 2016]