saipa webinar
TRANSCRIPT
Gert van HeerdenSenior Legal Manager: Office of the Tax
Ombud
SAIPA WebinarDispute Resolutions: What to do when you fail to lodge a dispute
within the timeframe?
20 September 2017
GENERAL INFORMATION
1. Any complaints about the OTO services or cases can be escalated to:
• Talitha Muade: Senior Manager of Operations
012 431 9109
• Eric Mkhawane: Chief Executive Officer as last resort.
2. Any reference to days in terms of this document refers to business days. In relation
to the tax dispute resolution procedure it will not only exclude weekends and public
holidays, but also the period between 16 December and 15 January.
1. Relevant Timeframes1.1 Objections
• 30 days after:
the date of the assessment; or
if reasons were requested, after the date on which reasons were provided; or
if SARS failed to provide and the taxpayer with reasons and the taxpayer applied
to the Tax Court to compel SARS to do so, after the date of the final outcome of the
application.
1.2 Appeals
• 30 days after SARS delivered the notice of disallowance of the
objection.
2. Date of Assessment vs
Delivery of Disallowance2.1 Date of Assessment
• The date on which the notice of assessment is issued, not when it is delivered if
SARS raises an assessment; or
• The date on which the return is filed if it is a self assessment.
2.2 Delivery
• “deliver”means to issue, give or send a document to designated address.
• SARS is deemed to have delivered a document if it has been
handed to the taxpayer;
left with a person older than 16;
sent by post;
sent to the designated electronic address.
3. Delivery to an Electronic
Address3.1 Electronic Address Includes:
email address;
fax; and
eFiling Profile.
3.2 Delivery to an Electronic Address HappensWhen:
the communications enters the information system of SARS; and
Is capable of being retrieved and processed by the taxpayer.
4. Extension of Objection
Timeframes4.1 Objection timeframes can be extended on request by:
• up to 30 days if reasonable circumstances exist; or
• between 31 days and three years if exceptional circumstances exist.
4.1 Reasonable vs exceptional circumstances
• Not defined.
• Reasonable circumstances is much easier to prove that exceptional.
• Exceptional circumstances generally means something out of the norm or not typical.
• Exceptional circumstances is defined for penalties and provide an indication of what mayconstitute exceptional circumstances.
a natural or human-made disaster;
a civil disturbance or disruption in services;
a serious illness or accident; and
serious emotional or mental distress.
5. Factors Taken into Account 5.1 Reasons for the delay
• Must be detailed. The taxpayer is seeking indulgence therefore theobligation to convince SARS it must extend lies with the taxpayer. It is notSARS’ responsibility to probe and look for reasons for the extension.
• In general would require circumstances beyond the taxpayer’s control.
• The use of a tax practitioner does not absolve a taxpayer from lodging intime.
5.2 Period of the delay
• Extension is not a right.
• Must substantiate why the period of the delay is justified under thecircumstances.
• Must show that objection was lodged as soon as possible .
5.3 Prospects of Success
• Must have a prima facie case.
• Not the deciding factor, but must be able to show that objection is notbeing used as delaying tactic.
6. Prescription of Objection6.1 Prescription Period
• 3 years from date of the assessment.
• No discretion afforded to SARS to extend beyond this period.
• No decision is made if a taxpayer requests extension beyond the 3 year
period, it must be denied by operation of the law.
• Not subject to a review application.
• Several SCA decisions dealing with this 3 year period including An
unreported case wherein the Court said prescription may be unfair, but it
is not unjust. In the HR Computek matter Court stated:
“And as a period of three years has elapsed, the taxpayer cannot now lawfully require SARS
to revisit its assessment even if it was wrong…”
7. Extension of Appeal7.1 Appeal timeframes can be extended on request by:
• up to 21days if reasonable circumstances exist; or
• at most 45 days if exceptional circumstances exist.
NB the maximum time available for noting an appeal is therefore
75 days after SARS delivers of the Disallowance of Objection.
• Similar to prescription of an objection;
• No discretion afforded to SARS to extend beyond this period.
• No decision is made if a taxpayer requests extension beyond the 3
year period, it must be denied by operation of the law.
• Not subject to a review application.
8. Remedies…8.1 Separate Objection and Appeal
• A decision by SARS to not extend the period in which to object or
appeal is subject to a objection and appeal procedure that runs
separately from the main dispute.
• Follows the same procedure, but the merits of the assessment are not
entertained, purely question on whether reasons for late filing are
reasonable or exceptional.
• Cannot object or appeal if the objection is filed more than 3 years
after date of the assessment or the appeal is filed more than 75 days
after SARS delivered the Disallowance of Objection.
8. Remedies (Continued)8.2 Application to Tax Court
• The Rules provides the option of applying to the Tax Court to order
the extension of the period within which to file both an objection or
an appeal.
• This can only be done if SARS refused to extend.
• It should be possible to bring this application as an alternative to
lodging an objection.
8. Remedies (Continued)8.3 CMO and Tax Ombud
• Neither can deal with the substance of the dispute but can investigate the way in which
the disputes are being dealt with by SARS.
• In other words can facilitate resolution of problems arising out of the procedure.
• Complaints must be lodged with the SARS CMO first before they can be lodged with the
Tax Ombud.
• Examples of matters in this subject that can and have been attended to by the Tax
Ombud include:
Where a request for extension is made to SARS before expiry of the 30 days to lodge an objection, but SARS
does not respond.
Where SARS invalidates an objection without considering a taxpayer’s request for condonation.
Where SARS declined a taxpayer’s request for condonation and the taxpayer objects thereto, but SARS refuses
to attend to the second objection.
10. Practical Tips• Avoid lodging late as far as possible.
• Keep a proper diary of clients that are under audit/verification or
have disputed assessments and check their eFiling profiles on a
regular basis.
• Ask for extension before the expiry of the period if you can see that
you may not be able to lodge timeously.
• Provide proper, detailed reasons for filing late.
THANK YOU