Author: Ben Strauss (Director, Tax, Cliffe Dekker Hofmeyr)
Be aware of potential liabilities.
The Tax Administration Act, No 28 of 2011 (TAA) took effect on 1 October 2012.
Among other things, the TAA makes third parties liable for the tax debts of taxpayers, under certain circumstances. In terms of s181 of the TAA, shareholders of a company can be liable for the tax debts of a company on winding up.
In terms of s181(1) of the TAA the provision applies "where a company is wound up other than by means of an involuntary liquidation without having satisfied its tax debt...." Put simply, a tax debt is an amount of tax due in terms of any law administered by the South African Revenue Service (Sars).
Section 240A of the Tax Administration Act, 2011 (as amended) requires that all tax practitioners register with a recognized controlling body before 1 July 2013. It is a criminal offense to not register with both a recognized controlling body and SARS.