Taxing times: New SARS rules for resolving tax disputes

There are new rules to resolve tax disputes with the South African Revenue Service (SARS) that will significantly affect taxpayers and the revenue authority itself. The new rules include an extension of time periods, amendments to the objection process and updates to the appointment of alternative dispute resolution facilitators.

According to Danielle Luwes, tax manager at Hobbs Sinclair, these are the changes you should know about:

Tax disputes: Extension of time periods

According to the new rules, you or SARS can agree to a shorter period if the timelines for various procedures are not already regulated by the rules.

The previous 2014 rules allowed for extensions only, but now the period can also be shortened.

Objection against an assessment

You must deliver a notice of objection within 80 days of the date of the assessment and not 30 days anymore as required by the 2014 rules.

If you asked for reasons, your notice of objection must be delivered within 80 days of the delivery of either the SARS notice that adequate reasons have been provided or the SARS letter with the reasons requested.

The 80-day period excludes the additional 30-day extension that you can request on reasonable grounds and exceptional circumstances may warrant an extension of up to three years.

Appealing on new grounds

Under the new rules, you can appeal on new grounds not raised in the notice of objection, unless it is a new objection against a part of the assessment you did not previously objected to.

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Appointment of an alternative tax dispute resolution facilitator

The facilitator must have appropriate tax experience and be acceptable to you and SARS.

Once the facilitator is accepted, a senior SARS official will appoint the facilitator within 15 days of the commencement date for the alternative dispute resolution. The facilitator must act independently and impartially.

Delivery of the facilitator’s report

The facilitator must deliver a report within five days of a meeting and a final report within 10 days after the end of the process.

New grounds in the statement of assessment and opposing appeal

SARS must provide a statement explaining why it made the assessment and why it opposes the appeal. Rule 31(3) was amended to allow SARS to add new grounds for disallowing the objection unless it changes the basis of the assessment entirely or requires a new assessment to be issued.

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Subpoenas of witnesses to the Tax Board and Tax Court

According to the new rules, someone can be subpoenaed by the Tax Board clerk or the Tax Court registrar to attend the appeal and give evidence or provide documents on issues relevant to the appeal. If you think the subpoena is irrelevant or unreasonable, you can approach the Tax Court for relief.

Luwes says it is essential to be aware of your rights and responsibilities as a South African taxpayer when it comes to taxation.

“It is crucial to be informed of these changes and seek advice from a tax practitioner who is up to date with tax law, policies and procedures. Knowledge is power when it comes to taxation.”