Dispute Resolution Services
Unicus Tax has a 100% success rate in resolving tax disputes in favour of taxpayers. This simply means we have always been able to get a tax liability reduced or a decision by SARS changed every time we have taken on a case through the objection and appeal process. The reason for this is aptly explained by one of our dispute resolution clients for whom we achieved an unprecedented result in the Tax Court with significant and extensive savings.
Tactical Defence Cases
We focus mainly (but not exclusively) on cases we call tactical defence cases (TDC). TDC’s are typically high value cases where the amount in dispute is in excess of R1 million and the assessments in question follows a full fledge audit by SARS. Challenging these assessments are often not simple and are also often the cases that SARS may be willing to push all the way to litigation if needs be. Taxpayers in these situations more often than not need a comprehensive defence strategy. These are not cases where simply providing documents will take care of the problem. These are typically cases where the assessment needs to be challenged on both a factual and legal basis with the necessary evidence.
Cases we take on
Case acceptance is at our sole discretion. We will not engage to defend taxpayers where it is clear to us that the taxpayer intentionally evaded tax. That is not to say if SARS penalised the taxpayer for intentionally evading tax we will not engage – it is not unheard of for SARS to impose penalties for intentional tax evasion even where the taxpayer was not actually intentionally evading tax.
Tactical Defence Cases
High level overview of tax disputes
Many tax disputes originate from an audit conducted by SARS followed by an additional assessment/assessments. Taxpayers can then object (typically by completing and submitting an NOO online or by completing an ADR1 and delivering it to prescribed addresses, depending on the circumstances). If SARS does not allow the objection, or only allows it in part, the taxpayer can appeal (typically by completing and submitting an NOA online or by completing an ADR2 and delivering it to prescribed addresses, depending on the circumstances). When on appeal, a taxpayer can agree with SARS to have the dispute settled by way of a process similar to mediation or, failing that, through litigation in either the tax board or tax court. If mediation and/or litigation in either the tax board and/or tax court fails, the taxpayer can appeal to higher courts.
During the process between additional assessment and eventual resolution, there are various interlocutory procedures taxpayers can follow – knowing when and how to use them can be extremely powerful and extremely effective – opportunities to use these processes are very often presented but also very often missed.
The process of objection and appeal is strictly regulated by time periods. Missing deadlines can be detrimental to the defence. However, the objection and appeal process is not the only means of challenging an assessment – there are other processes available as well.
burden of proof
Taxpayers, for the most part, bear the burden of proof. When disputing an assessment, taxpayers need to discharge this burden of proof. How to do this will depend on the issues under dispute and substantive law governing those issues. Without discharging this onus, the taxpayer is unlikely to succeed, and knowing what to prove, how to prove it and when requires an astute understanding of the substantive law governing the dispute.
Online Training Course
We have developed a comprehensive online training course specifically aimed to educate people on the tax dispute resolution process, what it is, the rules that apply and procedures that need to be followed.
This module comprises of three topics, all of which covers issues associated with tax controversy. Topic one covers objections and reasons, what is subject to objection, when to object, when to ask for condonation, how to do so, when and how to ask for reasons. Topic three covers appeals, in particular how and when to do so. Topic three covers some of the remedies available to taxpayers other than objection and appeal.
Topic 1 - Objection and Reasons
Topic 2 - Appeals
Topic 3 - Remedies other than Objection and Appeal and Refunds
We typically engage clients on tax disputes in two phases, to wit:
Our fees are generally based on time spent at the applicable hourly rate which vary from anything between R2 500 ex VAT per hour to R7 000 ex VAT per hour (excluding disbursements) depending on the circumstances. Alternative fee structures may be available depending on your facts and circumstances.
We are geared to deal with a tax dispute at almost any stage during a dispute with SARS, whether that be at objection or appeal or litigation stage.
Please provide the following information, insofar relevant and possible, when enquiring about our service:
All information shared with us will be treated and regarded as strictly confidential. We will not charge or otherwise bill you until we have been formally engaged and you have formally accepted the terms of our services.
Our dispute resolution team is headed by our founder, Nico Theron MTP (SA). Nico (BCom Law (cum laude); BCom Honors Taxation; MCom Taxation (SA and International Tax)) has over a decade’s experience in dealing with tax disputes, mainly for large corporate taxpayers. He is the author of a book that explains the tax dispute resolution remedies and which has been favourably reviewed by Advocate Julia Boltar.
The book is titled: Practical Guide to Handling Tax Disputes and has been published by the leading global provider of legal, regulatory and business information – Lexis Nexis. In addition, Nico is a member of Tax Administration Technical Work Group of the South African Institute of Tax Professionals where is also registered as a master tax practitioner. Nico lectures on tax dispute resolution from time to time to post graduate tax students at the University of Pretoria. Nico is well known for his strategic and pragmatic way of resolving tax disputes.
You can reach us by sending an email to [email protected]. A member of our team will then make contact with you to discuss the way forward. Your accountant/auditor/lawyer/tax practitioner can also contact us on your behalf – this is preferred in most cases.
Overview of some of our past cases
XYZ CC v CSARS
In this case, SARS had raised additional income tax assessments for several years of assessment as well as VAT assessments for several VAT periods following an audit by SARS. The gist of the adjustments made by SARS was that SARS had increased income and decreased expenses and imposed an understatement penalty of 100% for gross negligence. The taxpayer had been the victim of an incompetent accountant. We successfully defended the taxpayer resulting in SARS decreasing the penalty from 100% to 10% and also successfully defended the tax on several years and periods on the basis of prescription
Disallowed input tax and penalties – XYZ 2 (Pty) Ltd v CSARS
Following an audit by SARS, SARS raised VAT assessments to disallow certain notional input tax credits claimed by the taxpayer across multiple VAT periods. While the disallowed input tax credits could not be challenged, we successfully decreased the understatement penalty.
Manufactured dividends and anti-avoidance – Mr A v CSARS
In this case, we were engaged to respond to a letter of audit findings to prevent SARS from raising an additional assessment. SARS intended to raise an additional assessment to tax certain dividends it regarded as manufactured dividends and by invoking a particular anti-avoidance rule aimed at certain dividend schemes. Our response prevented SARS from raising the imminent assessment.
Erroneous overpayment of tax – XYZ 6 (Pty) Ltd v CSARS
In this case, the taxpayer had made an accounting error which was only identified a couple of years after SARS had raised an assessment (but importantly, just before the assessment would prescribe). The effect of the accounting error was that the taxpayer’s taxable income had been drastically overstated and it had incorrectly overpaid a significant amount of tax. The objection remedy was not available. We nevertheless secured a reduced assessment and refund from SARS.
ETI credits forfeited – XYZ 1 (Pty) Ltd v CSARS
SARS disallowed various ETI credits claimed by the taxpayer on the basis that the credits had been forfeited. We successfully disputed the disallowance by SARS of the ETI credits resulting in SARS refunding the taxpayer accordingly.
Disallowed expenses and penalties – XYZ 3 (Pty) Ltd v CSARS
Following an audit by SARS, SARS disallowed certain deductions claimed by the taxpayer for income tax purposes on the basis that the amounts deducted are accounting provisions. Understatement penalties were imposed. We successfully disputed the assessment and the penalties by arguing that the accounting provision is effectively a section 24C allowance.
Penalties – XYZ 4 (Pty) Ltd v CSARS
Due to an e-filing technicality, the taxpayer erroneously claimed PAYE credits on its ITR14 return. Following a verification by SARS, SARS disallowed the PAYE credits on the basis that the taxpayer, despite the e-filing error, sought to unlawfully benefit by accepting the PAYE credits when filing the tax return. SARS imposed understatement penalties. We successfully defended the taxpayer against the understatement penalties at appeal stage with complete concession by SARS
Assessed losses and penalties – XYZ 5 (Pty) Ltd V CSARS
In this case, we were engaged to prevent an assessment to understatement penalties. SARS disallowed an assessed loss claimed by the taxpayer on the basis that the taxpayer had not yet commenced trading activities – an understatement penalty was proposed. Our response prevented SARS from imposing understatement penalties.
Tax refund – XYZ 7 (Pty) Ltd v CSARS
In this case, SARS refused to pay a refund to the taxpayer. By the time the taxpayer engaged us, it had relied on various remedies to try and get the refund released – all of them failed. We effected certain legal action to be instated resulting in prompt payment by SARS of the refund.
Why Choose us:
We are expert tax specialists with a vast amount of experience. Our experience and tax exclusive policy places us the forefront of tax law. If you have a tax problem/issue, chances are we have dealt it before and know how to handle it to your best advantage.
Expert Tax Specialists
We do not do auditing, accounting or any type of work other than tax. We are truly specialised and indeed experts in the field of tax. If you need a true tax expert, we are the people to speak to.
One of our main drivers is to be efficient. Our experience places us in a position to provide high quality deliverables and faster turnaround times.