Tax Admin Act

Question 1

Definition: Assessment

Answer 1

Assessment:
• The determination of the amount of a tax liability or
refund, by way of:
- self-assessment by the taxpayer or 
- assessment by SARS.

Question 2

Definition: Self-assessment

Answer 2

Self-assessment:
• A determination of the amount of tax payable under a tax Act by a taxpayer and the act of—
- submitting a return which incorporates the determination of the tax; or
- if no return is required, making a payment of the tax.

Question 3

Definition: Business Day

Answer 3

Means a day which is not a Saturday, Sunday or public holiday.
• Dispute resolution provisions of Chapter 9 only, the days from 16 December of each year to 15 January of the following year are excluded.

Question 4

What is your acronym for the required sections:

Answer 4

DRD
Definitions/Registration Requirments/ Duty to keep records

WP
Withdrawal of Assessments/ Period of limitation for issuance of assessments

BOP
Burden of proof/Objection against assessment or decision/Payment of tax pending appeal

AUCR
Administrative non-compliance penalties/ Understatement penalty/ criminal offences/ Registration of Tax Practitioners and Reporting of unprofessional conduct

Question 5

Registration of TP s22
s22(1) - 2
s22(2) - 3
s22(4) - 1
s22(5) - 1

Answer 5

• s22(1) - A person may:

• Be obliged to register as a taxpayer in terms of a tax Act; or
• Register voluntarily.

• s22(2)

• Must apply for registration within the period provided for in a tax Act.
• If no period is provided for, then within 21 business days of becoming obliged to register.
• Must apply in the prescribed form and manner and must provide SARS with all relevant particulars.

• s22(4)
- If SARS does not receive all the relevant particulars, taxpayer could be treated as not having applied.

• s22(5)
- If taxpayer fails to register, SARS can register the taxpayer

Question 6

Withdrawal of assessments s98

Answer 6

• Assessment was issued to the wrong taxpayer;
• Wrong tax period
• As result of incorrect payment allocation

Question 7

Period of limitation for issuance of assessments s99

Answer 7

• No additional/reduced assessment 3 years after date of original assessment
  or
• 5 years for self-assessment

But doesn’t apply if:

• fraud
• misrepresentation
• material-nondisclosure

Question 8

CH9 of Tax admin?

Answer 8

• Provides legal framework for disputes across all tax types

- s104 of Tax admin (objections) read together with rules under s103 (only rule 6 & 7)

Question 9

Objections:

Rule 6 - request for reasons

Answer 9

The request for reasons must:
– Be made in the prescribed form and manner
– Specify an address at which the taxpayer will accept delivery of
the reasons; and
– Be delivered to SARS within 30 days from the date of assessment

• day means business day as defined in s1 of TAA

Question 10

Objections:

Objections - s104-106 + rule 7

Answer 10

The objection must:
– Be delivered to SARS within 30 days after delivery of the reasons requested OR within 30 days of the date of assessment where no reasons are requested;
– Be completed in the prescribed form (NOO1 or ADR1 form);
– Specify the grounds of the objection;
– Specify an address at which the taxpayer will accept delivery of
SARS’ decision (if eFiling not used); and
– Be signed by the taxpayer’s duly authorised representative.

‘Date of assessment’:
• Issue date of the notice of assessment per s1 of the TAA

Question 11

What if I am out of time to object?

Answer 11

• SARS may extend the period by 30 days if reasonable grounds
  exist for the delay.
• SARS may extend the period by more than 30 days if satisfied that exceptional circumstances gave rise to the delay. [s104(4) and s104(5)]

Question 12

How long does SARS have to respond to my objection?

Answer 12

SARS must notify you of the outcome of the objection within 90 days of delivery thereof or within 60 days of the delivery of any documents SARS has requested.

Question 13

Payment of tax pending objection or appeal

Answer 13

• Your obligation to pay tax is not automatically suspended by an objection or appeal. [s164(1)]
• However, you could request a suspension of payment pending the outcome of the objection. [s164(2) – (8)

Question 14

TAA Penalty Regime

Answer 14

Administrative penalty CH15:

• General non-compliance fixed amount penalties
• Specific non-compliance percentage based penalties

Understatement Penalty CH16

Criminal Offences CH17:

• General offences listed in Chapter 17
• Specific offences listed in the tax acts

Question 15

Remit an administrative non- compliance penalty (4):

Answer 15

1. Failure to register s216
2. Failure is a nominal or a first incidence s217
   - A first incidence means that a penalty has not been
   imposed for the past 36 months (in terms of 208)
   — Whether for the same default or any other type of default.
   • A nominal incidence of non-compliance:
   - Triggering a fixed amount penalty is where the duration of the non-compliance is less than five business days.

In terms of s217(1) and (3) SARS may remit an administrative non-compliance penalty up to R2 000 if:

• Reasonable grounds for non-compliance and
• The non-compliance has been remedied.

3. Exceptional circumstances exist s218
   The exceptional circumstances include:
   - External factors: If there was a natural or human made disaster etc
   - Factors personal to the taxpayer: sickness
   - Serious financial hardship:
   - Act by SARS
4. Penalty was incorrectly imposed
   s219

Question 16

Understatement Penalty

- define (3) + explain

Answer 16

S221 Defines an understatement:
 Prejudice to SARS as a result of:
• Default in rendering a return
• Omission from a return
• Incorrect statement in a return

Understatement penalty % is applied to the shortfall.
- see table for behaviour and %

Question 17

Tax Practitioners s240(1) and s240(2)

Answer 17

Tax Practitioners
• s240(1) of the TAA provides that every natural person
- Who advises or assists with the application of a tax Act or completes
or assists in the completion of a return.
- Must register with a ‘recognised controlling body’ and register with
SARS as a tax practitioner

• S240(2) - not required to be registered:
- Provides advice or completes returns for no charge;
- Provides advice incidental to providing other goods or service to a
person;
- Provides advice or completes returns for his employer on a full-time basis or under the supervision of a registered tax practitioner

• Registration must take place with both SARS and the ‘recognised controlling body’ within 21 business days.