187.    General interest rules

(1)     If a tax debt or refund payable by SARS is not paid in full by the effective date, interest accrues, and is payable, on the amount of the outstanding balance of the tax debt or refund-

[Words preceding paragraph (a) substituted by section 59 of Act 23 of 2015 effective on 1 October 2012]

(a)     at the rate provided under section 189; and

(b)     for the period provided under section 188.

(2) Interest payable under a tax Act is calculated on-

(a)     the daily balance owing; or

(b)     the daily balance owing and compounded monthly, which method of determining interest will apply to a tax type from the date the Commissioner prescribes it by public notice. 

(3)     The effective date for purposes of the calculation of interest in relation to-

(a)     tax other than income tax or estate duty for any tax period, is the date by which tax for the tax period is due and payable under a tax Act;

(b)     income tax for any year of assessment, is the date falling seven months after the last day of that year in the case of a taxpayer that has a year of assessment ending on the last day of February, and six months in any other case;

(c)     estate duty for any period, is the earlier of the date of assessment or 12 months after the date of death;

(d)     a fixed amount penalty referred to in section 210, is the date of assessment of the penalty, and in relation to an increment of the penalty under section 211(2), the date of the increment;

(e)     a percentage based penalty referred to in section 213, is the date by which tax for the tax period should have been paid;

[Paragraph (e) amended by section 59 of Act 23 of 2015 effective on 8 January 2016]

(f)      an understatement penalty, is the effective date for the tax understated;

[Paragraph (f) amended by section 59(1)(b) of Act 23 of 2015 and by section 31(a) of Act 24 of 2020]

(g)     an outstanding tax debt referred to in section 190(5), is the date of payment of a refund which is not properly payable under a tax Act; and

[Paragraph (g) added by section 59(1)(b) of Act 23 of 2015 and amended by section 31(b) of Act 24 of 2020]

(h)     an erroneous payment referred to in section 190(1)(b), is the date 30 days after the date that the payment was made.

[Paragraph (h) added by section 31(c) of Act 24 of 2020]

(4)     The effective date in relation to an additional assessment or reduced assessment is the effective date in relation to the tax payable under the original assessment.

(5)     The effective date in relation to a jeopardy assessment is the date for payment specified in the jeopardy assessment.

(6)     If a senior SARS official is satisfied that interest payable by a taxpayer under subsection (1) is payable as a result of circumstances beyond the taxpayer’s control, the official may, unless prohibited by a tax Act, direct that so much of the interest as is attributable to the circumstances is not payable by the taxpayer.

(7)     The circumstances referred to in subsection (6) are limited to-

(a)     a natural or human-made disaster;

(b)     a civil disturbance or disruption in services; or

(c)     a serious illness or accident.

 

(8)     SARS may not make a direction that interest is not payable under subsection (6) after the expiry of three years, in the case of an assessment by SARS, or five years, in the case of self-assessment, from the date of assessment of the tax in respect of which the interest accrued.

[Subsection (8) added by section 59 of Act 23 of 2015 effective on 8 January 2016]