Highlights from the SARS National Stakeholder Meeting held on 4 November 2014
12 December 2014
Posted by: Author: SAIT Technical
Author: SAIT Technical
Power of attorney (POA) forms
The recognised controlling bodies (RCBs) mentioned that it
is problematic for tax practitioners to have their clients update their POAs
every 2 years as required by SARS; especially given the large numbers of
clients of some practitioners. It was admitted by SARS that their practice of
only allowing POAs with a lifespan of 2 years is not supported by law. They
committed to investigating this issue and providing feedback at a later date.
Senior SARS official list
SARS has assured the RCBs that the list will soon be made available,
especially considering a new Commissioner was recently appointed.
Printing of returns on e-Filing
The RCBs were informed by SARS to send a list to them of the
various returns that cannot be printed before they are filed, so that this can
be remedied as soon as possible. We therefore urge our members to provide the
SAIT with feedback in this regard.
Documents saved on e-Filing
There are a lot of documents currently saved by taxpayers on
e-Filing but not yet submitted to SARS. These documents take up an enormous
amount of space. SARS have informed the RCBs that all such documents will be
deleted from e-Filing in the not-too-distant future. The RCBs will be notified
by SARS prior to the deletion, so that practitioners can be warned.
Automatic income tax registration for newly
SARS confirmed that they are currently working together with
the Companies and Intellectual Property Commission (CIPC) to ensure that when a
company is registered with CIPC, a tax number gets allocated to that entity
within a short space of time (usually a week). Tax practitioners who go to a
SARS branch to register a newly-formed company for income tax will find
sometimes that the company has already been registered. It is the intention of
SARS that in future, all companies will be registered for income tax this way.
However, as this process is only in the beginning phase, it
is not happening with each and every company registration
E-Filing deferral of payment and request for
The RCBs have requested that a functionality for the
‘request for reasons of an assessment’, as contemplated in Rule 6 of the
Dispute Resolution Rules, be made available on e-Filing. The same request was
made regarding an e-filing facility for payment deferrals. SARS have expressed
that they want these facilities to be automated and are currently working on
this. It was stated that the ‘request for reasons’ facility would be on
e-filing sometime during early 2015.
Status of SARS service charter and
SARS initially released the SARS Service Charter on the 19th
of October 2005. This document performed an important function in ensuring that
SARS performs its functions within agreed standards. The RCBs pointed out to
SARS that the document is no longer available on the SARS homepage and urged
SARS to return it. SARS stated that it is currently being finalised to bring it
up to date with recent legislative and operational developments. However, a
date was not given as to when the updated version would be made available.
SARS Escalation process
SAIT raised the issue that the escalation process within
SARS is currently flawed. After going through the normal internal channels to
attempt to deal with a problem (up to SSMO level), taxpayers are entitled to
approach the Tax Ombud. Branch managers insist, however, that the queries be
escalated to them before being referred to the Tax Ombud. Additionally, there
are escalation lists that SARS has provided to the RCBs upon request. Tax
practitioners have had good results with the help provided by the SARS
officials thereon, but this all adds to the waiting period for resolving cases
and is particularly unhelpful for those in dire straits.
SARS have stated that a new complaints management system
will be launched early in 2015 that will clarify the process.
Different policies at branches/consultants
The RCBs noted inconsistencies
in how certain issues are dealt with at different branches or by different
consultants at the same branch. SARS stated that they have clear operational
policies which are available online and should there be a deviation from those
policies, the relevant ops executives can be contacted to address these matters.
SARS requirement to register as a foreign
The RCBs have further
pointed out that SARS requires foreign-incorporated entities to register as
"external companies” with CIPC. It was requested of SARS that this requirement
be withdrawn as it may result in unnecessary complications. Furthermore, there
is no basis for this requirement in the legislation. SARS have stated that an
alert may be issued on this once the situation is rectified.
ITR12 not fully catering for the section
The ITR12 return does not
fully cater for the exemption provided by section 10(1)(o)(ii) of the Income
Tax Act (No. 58 of 1962) (‘the Act’). In the Wizard section where the number of
days must be entered, one only has the option to enter the number of days
outside of South Africa for the 2014 and prior years of assessment. This may, however,
lead to practical problems where the taxpayer only satisfies the 60 continuous
day and 183 days requirement after 28 February 2014.
The problem therefore is
that the ITR12 return is referring to ‘years of assessment’ rather than any
‘period of 12 months’. The section 10(1)(o)(ii) exemption works according to
any period of 12 months and must be apportioned if its requirements are met
over two years of assessment. The SARS Call Centre then advises taxpayers/tax
practitioners that they would need to object to the assessment if the section
10(1)(o)(ii) exemption was not calculated correctly.
This, however, is
impractical and a simpler solution would be to amend the return to refer to any
period of 12 months and to therefore align the return with the criteria of
SARS noted that this
matter is very difficult to deal with from an operational standpoint and that
it will be tackled next year.