185.    Tax recovery on behalf of foreign governments

(1)     If SARS has, in accordance with an international tax agreement, received-

(a)     a request for conservancy of an amount alleged to be due by a person under the tax laws of the other country where there is a risk of dissipation or concealment of assets by the person, a senior SARS official may authorise an application for a preservation order under section 163 as if the amount were a tax payable by the person under a tax Act; or

[Paragraph (a) substituted by section 58 of Act 23 of 2015 effective on 1 October 2012]

(b)     a request for the collection from a person of an amount alleged to be due by the person under the tax laws of the other country, a senior SARS official may, by notice, call upon the person to state, within a period specified in the notice, whether or not the person admits liability for the amount or for a lesser amount.

(2)     A request described in subsection (1) must be in the prescribed form and must include a formal certificate issued by the competent authority of the other country stating-

(a)     the amount of the tax due;

(b)     whether the liability for the amount is disputed in terms of the laws of the other country;

(c)     if the liability for the amount is so disputed, whether such dispute has been entered into solely to delay or frustrate collection of the amount alleged to be due; and

(d)     whether there is a risk of dissipation or concealment of assets by the person.

(3)     In any proceedings, a certificate referred to in subsection (2) is-

(a)     conclusive proof of the existence of the liability alleged; and

(b)     prima facie proof of the other statements contained therein.

(4)     If, in response to the notice issued under subsection (1)(b), the person-

(a)     admits liability;

(b)     fails to respond to the notice; or

(c)     denies liability but a senior SARS official, based on the statements in the certificate described in subsection (2) or, if necessary, after consultation with the competent authority of the other country, is satisfied that-

(i)      the liability for the amount is not disputed in terms of the laws of the other country;

(ii)     although the liability for the amount is disputed in terms of the laws of the other country, such dispute has been entered into solely to delay or frustrate collection of the amount alleged to be due; or

(iii)    there is a risk of dissipation or concealment of assets by the person,

the official may, by notice, require the person to pay the amount for which the person has admitted liability or the amount specified, on a date specified, for transmission to the competent authority in the other country.

(5)     If the person fails to comply with the notice under subsection (4), SARS may recover the amount in the certificate for transmission to the foreign authority as if it were a tax payable by the person under a tax Act.

(6)     No steps taken in assistance in collection by any other country under an international tax agreement for the collection of an amount alleged to be due by a person under a tax Act, including a judgment given against a person in the other country for the amount in pursuance of the agreement, may affect the person’s right to have the liability for the amount determined in the Republic in accordance with the relevant law.