Section 241(2)(a) of the Tax Administration Act (No. 28 of
2011) allows a senior SARS official to lodge a complaint with an RCB if a
registered tax practitioner "…without exercising due
diligence prepared or assisted in the preparation, approval or submission of
any return, affidavit or other document relating to matters affecting the
application of a tax Act”.
But what is meant by the practice
of due diligence? The Oxford Dictionary defines due diligence as the necessary
steps that a reasonable person would take to avoid committing a tort or
offence. Professionals adhere themselves to higher rules and standards of
practice in order to not dilute the standards of their profession. To practice
due diligence, tax practitioners must perform their duties to the best of their
abilities and must be professional, honest, consistent and up to date with the
most recent legislative changes. Tax practitioners would also be required to
evaluate, to some extent, the accuracy of the information provided by the
The Institute developed the SA Tax
Standards based on the due diligence requirement of section 241(2)(a) of the
TAA. Tax practitioners are strongly advised to follow the Standards in all
engagements to discharge their duty of practising due diligence.
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.