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South Africa Issues Tax Dispute Resolution Guide

by Lorys Charalambous,, Cyprus

31 October 2014

The South African Revenue Service (SARS) has issued a new guide on the resolution of tax disputes, with particular regard to the provisions contained in the new Tax Administration (TA) Act that was enacted on October 1, 2012.

The guide confirms that when taxpayers are aggrieved by an assessment or a decision they have a right to dispute it. It says Chapter 9 of the TA Act on Dispute Resolution provides the legal framework for disputes across all tax types, and must be read in addition to the rules under section 103 of that Chapter, which have now been gazetted and apply with effect from July 11, 2014.

Essentially, the new rules govern the procedures to lodge an objection and appeal against an assessment or decision; alternative dispute resolution procedures under which SARS and the person aggrieved by an assessment or decision may resolve a dispute in accordance with the rules; and the conduct and hearing of an appeal before a tax board or tax court.

The tax board and tax court are tribunals created under the TA Act, and a taxpayer may also appeal the judgment of the tax court to the High Court or Supreme Court of Appeal.

The new rules also fix certain shortcomings in the old rules. They simplify the rules to enhance understanding of and compliance with them; shorten procedural time periods in order to improve turnaround times for finalizing disputes; and provide for more effective remedies to address failures to comply with time periods.

They are also said to give a better balance between taxpayer rights and remedies, and SARS's powers and duties; and regulate the use of the SARS eFiling platform for disputes.

Transitional procedures are also contained in the rules. They provide that disputes not finalized at the commencement date of the new rules (that is, July 11, 2014) will generally be dealt with and finalized under the new rules issued under the TA Act. For example, if a taxpayer has objected under the old rules and the objection has not been dealt with by SARS upon commencement of the new rules, the dispute must continue and the objection must be dealt with by SARS under the new rules "as if taken or instituted under the new rules."

TAGS: court | South Africa | compliance | tax | tax compliance | law | tax authority | legislation | regulation | Africa | Tax

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