Global Courant
The South African Revenue Service (SARS) has published a host of new rules that taxpayers should be aware of when challenging steps taken by the taxpayer – including the methods by which these objections should be made.
South Africa’s income tax season starts next month, with the following dates:
Private taxpayers (non-provisional): July 7, 2023 @ 8:00 PM to October 23, 2023 Provisional taxpayers: July 7, 2023 @ 8:00 PM to January 24, 2024
Each tax season brings with it a myriad of objections and disputes over tax rulings. According to tax experts at Tax Consulting SA, the IRS has made a concerted effort to push most of these to digital channels to streamline the process.
One of the changes taxpayers should be aware of is that SARS has removed the ability to handle physical mail disputes – in terms of the new rules, objections “must be made… to the taxpayer’s electronic filing page via www.sarsefiling.co. Sat”.
Tax Consulting SA said this is largely a positive change and noted that it has seen an increase in the number of people who have not taken all the prescribed necessary steps when filing objections, seriously hampering the process.
Ultimately, an appeal against a decision by the tax authorities can no longer be delivered manually by post if eFiling is not available. If eFiling is unavailable for any reason, the taxpayer’s only alternative is to arrange for such objection to be filed in person with a SARS office.
Tax Consulting said the push for digital allows SARS — and tax practitioners — to get a “holistic” view of a taxpayer’s tax affairs without having to wait for manual processes to finalize the data. This, in turn, should speed up any disputes and resolutions.
However, the method of filing isn’t the only thing changing for tax season 2023.
Danielle Luwes, Tax Manager at Hobbs Sinclair, highlighted some of the biggest changes that will be in effect this tax season.
Extension of deadlines
Under the new rules, the parties (taxpayers or SARS) can agree on shorter deadlines if the timelines for various proceedings are not already regulated by the rules.
The 2014 rules only allowed overtime.
Object to attack
A notice of objection (NOO) must be filed by a taxpayer within 80 days (30 days under the 2014 rules) of the date of the assessment.
If the taxpayer has requested reasons, the NOO must be provided within 80 days of the delivery of either the SARS notification that sufficient reasons have been given or the SARS letter with the reasons requested.
The 80-day period does not include the additional 30-day extension that a taxpayer may reasonably request, and exceptional circumstances may warrant an extension of up to three years.
Under the new rules, a taxpayer can appeal on a new ground that has not been put forward in the NOO, unless it concerns a new objection to a part of the assessment that was not previously objected to.
Appointment of an alternative dispute resolution (ADR) facilitator.
The facilitator must have sufficient tax experience and be acceptable to both SARS and the taxpayer.
Once the facilitator has been accepted by all parties, a senior SARS officer will appoint the facilitator within 15 days of the effective date of the ADR.
The facilitator must act independently and impartially.
Delivery of the facilitator’s report
The facilitator is required to provide a report within five days of a meeting and a final report within 10 days of the end of the ADR process.
New motivation assessment notice and notice of objection
SARS must provide a statement explaining why they made the assessment and why they oppose the appeal. Rule 31(3) has been amended to allow SARS to add new grounds for rejecting the appeal unless it completely changes the basis of the assessment or requires a new assessment to be issued.
Summonses of witnesses before the tax authorities and the tax court
Under the new rules, an individual can be summoned by the Registrar of the Internal Revenue Service or the Registrar of the Internal Revenue Service to attend the appeal and testify or provide documents on issues relevant to the appeal. If a party believes the subpoena is irrelevant or unreasonable, they can ask the tax court for help.
SARS has also updated its information page for the upcoming tax season, with helpful guides and instructions on how to file your tax return.
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