The New Tax Administration Act

This new Act commenced on 1 October 2012 and brought in a few new laws which have made dealing with SARS quite difficult.

A few that you should be aware of are:

- If SARS incorrectly assesses you, even if they are obviously wrong, an objection needs to be lodged.

- If this objection is not lodged in the required time (30 days from the date of assessment), then SARS will require a very good reason as to the delay in objection.

- If an objection is not lodged to an incorrect assessment within a period of 3 years of the assessment date, SARS cannot revise the assessment, even if it agrees that the assessment is incorrect. The tax will still be payable.

- While incorrect assessments are under objection, you are still expected to pay the tax being demanded and will have to wait for the objection to be upheld before you receive your refund of the tax which was not payable in the first place.

This last point is one which can cripple a business, but there are mechanisms to have the tax suspended pending the objection. However, the process is a legal (and costly) one.

It is particularly important to ensure that your tax affairs are in order before buying or selling property or applying for tax clearances or directives. SARS will not approve these if there is tax outstanding, even if an objection has been lodged.

If you are in any doubt or have any queries, please contact Simone Maggott from our Tax Department on simone@kirkmanlanfear.co.za for advice.