“impermissible avoidance arrangement” means an arrangement in respect of which Part IIA of Chapter III of the Income Tax Act is applied and includes, for purposes of this Chapter, any transaction, operation, scheme or agreement in respect of which section 73 of the Value-Added Tax Act or any other general anti-avoidance provision under a tax Act is applied;

[Definition of “impermissible avoidance arrangement” inserted by section 61 of Act 16 of 2016 effective on 19 January 2017]

“repeat case” means a second or further case of any of the behaviours listed under items (i) to (vi) of the understatement penalty 15 percentage table reflected in section 223 within five years of the previous case;

[Definition of “repeat case” substituted by section 61 of Act 16 of 2016 effective on 19 January 2017]

‘substantial understatement’ means a case where the prejudice to SARS or the fiscus exceeds the greater of five per cent of the amount of ‘tax’ properly chargeable or refundable under a tax Act for the relevant tax period, or R1 000 000;

‘tax’ means a tax as defined in section 1, excluding a penalty and interest, and will for purposes of this Part include an employment tax incentive as referred to in section 2(1) of the Employment Tax Incentive Act, 2013 (Act 26 of 2013);

[Definition of ‘tax’ substituted by section 26(1) of Act 16 of 2022 deemed effective on 1 September 2022, and applicable to any return, for purposes of paragraph 14(2) of the Fourth Schedule to the Income Tax Act, submitted or after that date]

‘tax position’ means an assumption underlying one or more aspects of a tax return, including whether or not-

(a)     an amount, transaction, event or item is taxable;

(b)     an amount or item is deductible or may be set-off;

(c)     a lower rate of tax than the maximum applicable to that class of taxpayer, transaction, event or item applies; or

(d)     an amount qualifies as a reduction of tax payable; and

“understatement” means any prejudice to SARS or the fiscus as a result of-

(a)     failure to submit a return required under a tax Act or by the Commissioner;

[Paragraph (a) substituted by section 22 of Act 22 of 2018]

(b)     an omission from a return;

(c)     an incorrect statement in a return;

(d)     if no return is required, the failure to pay the correct amount of “tax”; or

(e)     an “impermissible avoidance arrangement.

[Definition of “understatement” amended by section 74 of Act 39 of 2013 and substituted by section 61 of Act 16 of 2016 effective on 19 January 2017]