Category: Chapter 18 – Registration of tax practitioners and reporting of unprofessional conduct (TAA)

Section 240 (TAA) – Registration of tax practitioners

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240.    Registration of tax practitioners

(1)     Every natural person who-

(a)     provides advice to another person with respect to the application of a tax Act; or

(b)     completes or assists in completing a return by another person,

must-

(i)      register with or fall under the jurisdiction of a ‘recognised controlling body’ by the later of 1 July 2013 or 21 business days after the date on which that person for the first time provides the advice or completes or assists in completing the return; and

(ii)     register with SARS as a tax practitioner in  the prescribed form and manner, within 21 business days after the date on which that person for the first time provides the advice or completes or assists in completing the return.

(2)     The provisions of this section do not apply in respect of a person who only-

(a)     provides the advice or completes or assists in completing a return for no consideration to that person or his or her employer or a connected person in relation to that employer or that person;

(b)     provides the advice in anticipation of or in the course of any litigation to which the Commissioner is a party or where the Commissioner is a complainant;

(c)     provides the advice as an incidental or subordinate part of providing goods or other services to another person;

(d)     provides the advice or completes or assists in completing a return –

(i)      to or in respect of the employer by whom that person is employed on a full-time basis or to or in respect of the employer and connected persons in relation to the employer; or

(ii)     under the supervision of a registered tax practitioner who has assigned or approved the assignment of those functions to the person.

(2A)  A tax practitioner who has assigned or approved the assignment of functions to a person under subsection (2)(d)(ii) is regarded as accountable for the actions of that person in performing those functions for the purposes of a complaint to a recognised controlling body under section 241(2).

(3)     A person may not register as a tax practitioner under subsection (1) or SARS may deregister a registered tax practitioner if the person or the registered tax practitioner, as the case may be-

(a)     during the preceding five years has been removed from a related profession by a ‘controlling body’ for serious misconduct;

(b)     during the preceding five years has been convicted (whether in the Republic or elsewhere) of-

(i)      theft, fraud, forgery or uttering a forged document, perjury or an offence under the Prevention and Combating of Corrupt Activities Act, 2004 (Act No. 12 of 2004); or

(ii)     any other offence involving dishonesty,

for which the person has been sentenced to a period of imprisonment exceeding two years without the option of a fine or to a fine exceeding the amount prescribed in the Adjustment of Fines Act, 1991 (Act 101 of 1991);

[Paragraph (b) amended by section 60(b) of Act 44 of 2014 and by section 24(a) of Act 22 of 2018.]

(c) during the preceding five years has been convicted of a serious tax offence; or

[Paragraph (c) added by section 60(b) of Act 44 of 2014 and amended by section 24(b) of Act 22 of 2018.]

(d) during the preceding 12 months has for an aggregate period of at least six months not been tax compliant to the extent referred to in section 256(3) and has failed to—

(i) demonstrate that he or she has been compliant for that period; or

(ii) remedy the non-compliance,

within the period specified in a notice by SARS.

[Subsection (3) amended by section 60(a) of Act 44 of 2014 effective on 1 October 2012. Paragraph (d) added by section 24(c) of Act 22 of 2018.]

(4)     If prosecution for a serious tax offence has been instituted but not finalised against a person or registered tax practitioner and if the person or registered tax practitioner continues with the commission of a serious tax offence after the criminal proceedings have been instituted, a senior SARS official may-

(a)     not register the person as a registered tax practitioner; or

(b)     suspend the registration of the registered tax practitioner,

for the duration of the criminal proceedings commencing on the date that prosecution is instituted and ending on the date that the person or registered tax practitioner is finally acquitted.

Section 240A (TAA) – Recognition of controlling bodies

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240A.    Recognition of controlling bodies

(1)     The Commissioner must recognise as a ‘recognised controlling body’-

(a)       . . . . . . 

[Paragraph (a) deleted by section 28 of Act 16 of 2022]

(b)     the Legal Practice Council established under the Legal Practice Act, 2014 (Act 28 of 2014);

[Paragraph (b) substituted by section 44(a) of Act 33 of 2019]

(c)       . . . . . .

[Paragraph (c) deleted by section 44(b) of Act 33 of 2019]

(d)     a statutory body that the Minister is satisfied is similar to the statutory bodies in this subsection and the details of which are published in the Gazette.

(2)     The Commissioner may recognise a ‘controlling body’, for natural persons who provide advice with respect to the application of a tax Act or complete returns, as a ‘recognised controlling body’ if the body-

(a)     in respect of such persons, maintains relevant and effective-

(i)      minimum qualification and experience requirements;

(ii)     continuing professional education requirements;

(iii)    codes of ethics and conduct; and

(iv)    disciplinary codes and procedures;

(b)     is approved in terms of section 30B of the Income Tax Act for purposes of section 10(1)(d)(iv) of the Act; and

(c)     has at least 1 000 members when applying for recognition or reasonable prospects of having 1 000 members within a year of applying.

(3)     A body must within the prescribed time period and in the prescribed form and manner, if recognised under-

(a)     subsection (1), submit a list of its members to whom the provisions under section 240(1) apply; and

(b)     subsection (2), submit a report on its members and compliance with this Chapter.

(4)     The Minister may appoint a panel of retired judges or persons of similar stature and competence one or more of whom may decide, on behalf of a body recognised under subsection (2), complaints lodged under section 241–

(a)     at the request of the body; or

(b)     if the Minister is satisfied that the body’s disciplinary process is ineffective.

(5)     The costs of the panel in deciding complaints will be borne equally by such a body and SARS.

(6)     If a body recognised under subsection (2) no longer meets the listed requirements, the Commissioner must notify it that if it does not take corrective steps within the period specified in the notice, its recognition will be withdrawn at the end of the period.

Section 241 (TAA) – Complaint to controlling body

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241.    Complaint to controlling body

 

(1)     A senior SARS official may lodge a complaint with a ‘controlling body’ if a person who carries on a profession governed by the ‘controlling body’, did or omitted to do anything with respect to the affairs of a taxpayer, including that person’s affairs, that in the opinion of the official-

 

(a)     was intended to assist the taxpayer to avoid or unduly postpone the performance of an obligation imposed on the taxpayer under a tax Act;

 

(b)     by reason of negligence on the part of the person resulted in the avoidance or undue postponement of the performance of an obligation imposed on the taxpayer under a tax Act;

 

(c)     constitutes a contravention of a rule or code of conduct for the profession which may result in disciplinary action being taken against the person by the body;

 

(d)     constitutes conduct under subsection (2) by a registered tax practitioner.

 

(2)     A senior SARS official may lodge a complaint with a ‘recognised controlling body’ if a registered tax practitioner has, in the opinion of the official-

 

(a)     without exercising due diligence prepared or assisted in the preparation, approval or submission of any return, affidavit or other document relating to matters affecting the application of a tax Act;

 

(b)     unreasonably delayed the finalisation of any matter before SARS;

 

(c)     given an opinion contrary to clear law, recklessly or through gross incompetence, with regard to any matter relating to a tax Act;

 

(d)     been grossly negligent with regard to any work performed as a registered tax practitioner;

 

(e)     knowingly given false or misleading information in connection with matters affecting the application of a tax Act or participated in such activity; or

 

(f)      directly or indirectly attempted to influence a SARS official with regard to any matter relating to a tax Act by the use of threats, false accusations, duress, or coercion, or by offering gratification as defined in the Prevention and Combating of Corrupt Activities Act, 2004 (Act No. 12 of 2004).

Section 242 (TAA) – Disclosure of information regarding complaint and remedies of taxpayer

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242.    Disclosure of information regarding complaint and remedies of taxpayer

 

(1)     Despite section 69, the senior SARS official lodging a complaint under section 241 may disclose the taxpayer information as in the opinion of the official is necessary to lay before the ‘controlling body’ to which the complaint is made.

 

(2)     Before a complaint is lodged or information is disclosed, SARS must deliver to the taxpayer concerned and the person against whom the complaint is to be made notification of the intended complaint and information to be disclosed.

 

(3)     The taxpayer or that person may, within 21 business days after the date of the notification, lodge with SARS an objection to the lodging of the complaint or disclosure of the information.

 

(4)     If on the expiry of that period of 21 business days no objection has been lodged or, if an objection has been lodged and SARS is not satisfied that the objection should be sustained, a senior SARS official may thereupon lodge the complaint as referred to in section 241.

Section 243 (TAA) – Complaint considered by controlling body

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243.    Complaint considered by controlling body

 

(1)     The complaint is to be considered by the ‘controlling body’ according to its rules.

 

(2)     A hearing of the matter where details of a person’s tax affairs will be disclosed, may be attended only by persons whose attendance, in the opinion of the ‘controlling body’, is necessary for the proper consideration of the complaint.

 

(3)     The ‘controlling body’ and its members must preserve secrecy in regard to the information as to the affairs of a person as may be conveyed to them by SARS or as may otherwise come to their notice in the investigation of the complaint and must not communicate the information to a person other than the person concerned or the person against whom the complaint is lodged, unless the disclosure of the information is ordered by a competent court of law.