VDP APPLICATION REJECTED: NOW WHAT?

VDP APPLICATION REJECTED: NOW WHAT?

Most taxpayers and tax practitioners are by now familiar with the Voluntary Disclosure Program  (VDP) process and the relief/incentive that the VDP offers.  Since taxpayers often bargain on getting VDP relief when they apply, a rejection by SARS of the VDP application is often not well received by taxpayers. If SARS rejects a VDP application, which they are entitled to do if the application does not satisfy the relevant requirements, it means SARS will not grant any relief from penalties. The question is – what to do next? Can the taxpayer decide not to disclose and “back out” of the...

PRESCRIPTION, ASSESSMENTS, SARS’ SUBJECTIVE SATISFACTION AND DISPUTES

PRESCRIPTION, ASSESSMENTS, SARS’ SUBJECTIVE SATISFACTION AND DISPUTES

In 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 satisfied themselves of the existence of the requisite fraud. What ensued was, amongst other things, an analysis by the court regarding the circumstances under which SARS may raise an assessment post prescription.  Whilst the analysis by the court of these circumstances relate to the now-repealed...

SOMETHING IS SERIOUSLY AMISS WITH THE TAX OBJECTION PROCESS

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 the OTO, there is one that for us at Unicus Tax Specialists SA stands out above the rest and which should be the single biggest cause for concern in the context of tax disputes. That finding is that over the period investigated by the OTO,...

COVID-19:  HOME OFFICES AND TAX DEDUCTIONS

COVID-19: HOME OFFICES AND TAX DEDUCTIONS

The media is rife with comments regarding the economic impact of the outbreak of the COVID-19 virus (the so-called “Coronavirus”) in South Africa. Many people have been asked, or is required, to work from home in order to curb the spread of the virus. Is there at least some form of tax break associated with working from home? Imagine Mr X. Mr X is a salaried employee who usually works at the offices of his employer, during normal office hours. Due to the outbreak of COVID-19, Mr X’s employer has requested or required Mr X to work from home for...

FINANCIAL EMIGRATION, TAX RESIDENCY AND SA BUDGET 2020: HAS THE CAT BEEN LET OUT OF THE BAG?

FINANCIAL EMIGRATION, TAX RESIDENCY AND SA BUDGET 2020: HAS THE CAT BEEN LET OUT OF THE BAG?

Many seem to be surprised by comments in the 2020 Budget Review documents released on 26 February 2020 to the effect that financial emigration status and tax residency status are not synonymous. There also seems to be confusion about the impact on a person’s tax residency status if, as mentioned in the 2020 Budget, the financial emigration process is phased out. The reason for the surprise and confusion appears to be the belief that financial emigration automatically results in and is directly connected to a change in tax residency status from resident to non-resident.  Nothing could be further from the...

‘TIS THE SEASON FOR SARS AUDIT FINDINGS

‘TIS THE SEASON FOR SARS AUDIT FINDINGS

January marks not only the beginning of the new year but also, in our experience, sees an increase in audit findings issued by SARS. The reason for this, we can only speculate, is that March is the fiscus’ year end, fiscal targets must be reached and targets are more likely to be reached when additional assessments are issued. Given the fact that the Tax Administration Act, No. 28 of 2011 (“the TAA”) requires of SARS to allow a taxpayer 21 business days to respond to a letter of audit findings before an additional assessment can be raised (and therefore targets...

TAX CLEARANCE CERTIFICATES: LAW CHANGES

TAX CLEARANCE CERTIFICATES: LAW CHANGES

Law Changes The importance of a tax clearance certificate for most businesses cannot be overstated. It often happens though that SARS raises an assessment giving rise to an unexpected tax liability that affects the business’ tax standing. This, in turn, almost always adversely affects the business. Simply paying the extra tax assessed to ensure the business is in good standing again is not always an option, especially if the taxpayer intends disputing the underlying assessment. Where a taxpayer intends disputing the assessment, the taxpayer can request SARS to suspend the payment of the tax liability pending the outcome of the...