UNDERSTATEMENT PENALTIES: SARS’ BURDEN OF PROOF IS IRRELEVANT?
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UNDERSTATEMENT PENALTIES: SARS’ BURDEN OF PROOF IS IRRELEVANT?

In a recent case[1] the Tax Court had to adjudicate on the imposition by SARS of understatement penalties on a taxpayer in consequence of a taxpayer’s failure to timeously declare a capital gain. SARS imposed a penalty of 25%, which is a penalty for failure by the taxpayer to take reasonable care when completing a...

ABUSING TAX COURT PROCESSES WORK?
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ABUSING TAX COURT PROCESSES WORK?

[Durban, 03 March 2021] The full bench of the Western Cape High court recently delivered judgment¹ (Cloete J dissenting) in a favour of a taxpayer who, according to the Tax Court, was simply abusing process. When studying the judgment of the Tax Court, it is difficult to see how the taxpayer’s approach was anything more...

PRESCRIPTION, ASSESSMENTS, SARS’ SUBJECTIVE SATISFACTION AND DISPUTES
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PRESCRIPTION, ASSESSMENTS, SARS’ SUBJECTIVE SATISFACTION AND DISPUTES

150In a recent case[1], a taxpayer tried to defend himself against an assessment raised by SARS after the original assessment prescribed. The gist of the taxpayer’s defence, insofar relevant here, was that SARS was not allowed to have raised the assessment in question because the original assessment had prescribed and that SARS had not objectively...

SOMETHING IS SERIOUSLY AMISS WITH THE TAX OBJECTION PROCESS
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SOMETHING IS SERIOUSLY AMISS WITH THE TAX OBJECTION PROCESS

The Office of the Tax Ombud (OTO) recently released its 2020 Systemic Investigation Report in which the OTO published its findings regarding certain investigations the OTO conducted into SARS’s systems. One of the issues investigated was various areas of non-compliance by SARS with the rules that govern objections and appeals. Amongst the various findings by...

KNOW YOUR ENEMY
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KNOW YOUR ENEMY

Sun Tzu, author of the Art of War, was a Chinese General who is credited with imparting the wisdom of “knowing your enemy”. According to General Tzu, “if you know the enemy and yourself, you need not fear the result of a hundred battles”. In our experience, this rings true thousands of years after the...

Tax appeals – how long can SARS take?
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Tax appeals – how long can SARS take?

How long can SARS take SARS is known for taking their time when it comes to processing appeals against assessments, especially if the appeal is not destined for litigation from the outset. Whilst there may be various reasons for these delays, the fact of the matter is that there are prescribed timelines within which certain...

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Bad idea: Tax objections drafted “On the back of a cigarette box”

Tax objections drafted Few taxpayers, in our experience, fully appreciate the importance and gravity of the early stages of the tax dispute resolution process with SARS – the objection stage. Too often, we see that objections are drafted in haste “on the back of a cigarette box” and important, often case-wining arguments, omitted from the...

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Is your tax objection late? Here’s what to do

SARS raises additional assessments all the time and for various reasons but mostly, an additional assessment, whether it be on VAT, income tax or PAYE is raised by SARS following an audit/verification. If a taxpayer is not satisfied with the assessment, the taxpayer can object against the additional assessment but has to do so within...

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SA Tax Penalties on Companies

Tax Penalties on Companies On 14 December 2018, the public notice that allows the South African Revenue Service (“SARS”) to impose penalties on companies for not submitting income tax returns was gazette. This is a new addition to the legion of penalties already faced by companies and permits the imposition of a monthly penalty on...