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Tax Administration FAQ – 7 May 2014

07 May 2014   (0 Comments)
Posted by: Author: SAIT Technical
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Author: SAIT Technical

1. Registration requirements for a non-resident earning rental income from a South African property

Q: A non-resident owns rental property in South Africa. The source of the rental income for tax purposes is therefore South Africa. Does the non- resident need to register for income tax in South Africa and declare the rental income in an income tax return?

A: Sec 67 of the Income Tax Act (No. 58 of 1962) (hereinafter referred to as ‘the Act’) requires a person to register for normal tax in terms of Chapter 3 of the Tax Administration Act (No. 28 of 2011) (hereinafter referred to as ‘the TAA’), should he or she at any time become liable for normal tax or is required to submit a return contemplated in sec 66 in the Act. 

You would therefore have to determine if the non-resident is liable for normal tax in South Africa by taking into account the relevant double tax agreement concluded between SA and the country in which the non-resident is resident. Should South Africa have taxing rights on the rentals and a normal tax liability exists, then it would seem as if the non-resident would have to register for normal tax. 

Alternatively registration would be required if the non-resident is required to submit a return contemplated in sec 66 in the Act. Sec 66(1) of the Act determines that the Commissioner must on an annual basis give notice of the persons required to submit returns, which notice is now issued in terms of sec 25 of the TAA. This notice is normally published late June every year and in the 2013 notice (GG36603) it required all natural persons carrying on a trade in SA and any non-resident company carrying on a trade through a permanent establishment (i.e. such leasing as rental property in SA) to register. The notice for the 2014 year of assessment has not yet been published.

2. Possible remedies when an objection was not submitted in time

Q: How can I resolve matters where the time has already lapsed to lodge a notice of objection or appeal?

A: Where an objection has not been submitted or is deemed not to have been submitted due to failure to comply with rules in the original time period or any extended time period in section 104(5) of the Tax Administration Act (No. 28 of 2011) (hereinafter referred to as ‘the TAA’) then the assessment becomes final (s100(1)(b) TAA).

Where an objection has not been delivered due to the date being missed the taxpayer may request SARS to condone the late submission within a period of 21 business days per section 104(5)(a) TAA. The requirements for this condonation are that exceptional circumstance’s existed.

The phrase "exceptional circumstances” take its normal grammatical meaning used in context and which per the Oxford Dictionary means something "unusual” occurred.

Thus if the objection is late you can within the 21 days request condonation if the reason for it being late is exceptional or unusual. Where no such circumstance exists (i.e. negligence to file etc.) SARS would not be able to condone the late submission. Note that a decision not to condone a late submission by SARS is also subject to objection if then it can be shown that the decision taken was unreasonable.

However if the basis of the assessment has been one of error or any of the circumstances listed in section 98(1) then you can still request SARS to reduce (section 93 TAA) or withdraw (section 98 TAA) the assessment.

However section 93(1)(d) read with section 93(2) TAA  (i.e. reduced assessments) and section 98 (i.e. withdrawal of assessments) does provide relief only to the extent that the limited circumstances stated in those sections apply which include an undisputed error. The latter is subject to the CSARS being satisfied that such error applies.

Please refer to the following link for an explanation of the workings of sec 93 and 98(1)(d) of the TAA:

You would therefore have to decide whether you would factually qualify for condonation and if not, when the nature of the dispute is such that it would be an undisputed error or matter dealt with in section 98(1) TAA.



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.

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