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 30 business days (this 30-day period may change to 60 days sometime in 2019 but as of the date of publishing this article, it is still 30 days). This 30-day deadline is often missed.

Are you dead in the water, so to speak, if you missed this deadline? Well, that depends. If you are more than three years late, then it will be near impossible to get the assessment revised/reversed through the objection process (other remedies may be available under the Tax Administration Act though depending on the facts). Contact us in these cases for expert tax dispute resolution guidance.

If you are not more than three years late, you are still in trouble but not necessarily dead in the water. The level of trouble you are in and whether your case is still salvageable depends in part on whether you are more than 30 days late (i.e. more than 60 days have lapsed since the date of the additional assessment) or less than 30 days late (i.e. less than 60 days have lapsed since the date of assessment).

More than 30 days late is more difficult to get around. In these cases, the taxpayer needs to prove that the cause of the late submission of the objection is the existence of some exceptional circumstance/s before SARS will condone the late objection.  What are ‘exceptional circumstances’? The term has eluded precise definition in our courts but includes things such as “civil disturbances”, “natural or human made disasters”, “serious illness or accident”, “serious emotional or mental distress” and the like.

If you are less than 30 days late it is less difficult to get condonation for late submission since it does not require of the taxpayer to prove the existence of exceptional circumstances. Rather, it requires simply of the taxpayer to prove that there are reasonable grounds for the late submission of the objection. Like the term ‘exceptional circumstances’, the term ‘reasonable grounds’ is not defined. SARS, however, suggests (in their Interpretation Note 15) that a taxpayer will typically be able to prove reasonable grounds if the taxpayer proves that circumstances beyond the taxpayer’s control caused the late submission of the objection.

Proving the existence of exceptional circumstances (i.e. you are more than 30 days late with the objection) or proving the existence of reasonable grounds (i.e. you are less than 30 days late) in your condonation request requires careful consideration. Simply reducing to writing facts that are known to you as individual or as tax representative of a company or trust hardly ever serves to discharge the onus of proof. The ability to successfully discharge this onus is, in our experience, contingent upon the taxpayer or his/her/its representative having a comprehensive understanding of what exactly the burden of proof is and what evidence should be used in support of the stated facts in a condonation request.

If you are late with submitting your objection, the first step is to count the days from the date of assessment to establish how late you are as this will drive the entire strategy of your condonation request (and sometimes even the strategy on the merits of the case).  If you think you are dead in the water, contact us to find out about other remedies. If you are not more than three years late, start gathering evidence to prove the existence of exceptional circumstances or reasonable grounds to the required standard and draft your condonation request together with your objection or contact us for assistance.