Does SARS pay interest on delayed VAT refunds?
14 April 2015
Posted by: Author: SAIT Technical
Author: SAIT Technical
Q: Our client VAT
refund for September 2014 was only recently paid out with no interest. Does
SARS not pay interest on delayed VAT refunds? If they do how do we apply for
A: Section 45(1)
of the VAT Act clearly shows SARS must still pay out interest on delayed
"Where the Commissioner does not within the period of 21
business days after the date on which the vendor’s return in respect of a tax
period is received by an office of the South African Revenue Service refund any
amount refundable in terms of section 44 (1), interest shall be paid on such
amount at the prescribed rate (but subject to the provisions of section 45A)
and calculated for the period commencing at the end of the first-mentioned
period to the date of payment of the amount so refundable…”
There are a few
provisos to s45(1) where the 21 business days will be counted from a (later)
date other than that on which the VAT return was submitted. In calculating the
interest due to the taxpayer, you’d therefore have to calculate the interest
bearing in mind the provisos.
You can request SARS to pay out the interest by emailing a
letter to their regional PCC email box.
Disclaimer: Nothing in this query and answer should be construed as
constituting tax advice or a tax opinion. An expert should be consulted for
advice based on the facts and circumstances of each transaction/case. Even
though great care has been taken to ensure the accuracy of the answer, SAIT do
not accept any responsibility for consequences of decisions taken based on this
query and answer. It remains your own responsibility to consult the relevant
primary resources when taking a decision.