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Are there any rulings or court cases dealing with the retention of records?

17 April 2015   (0 Comments)
Posted by: Author: SAIT Technical
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Author: SAIT Technical

Q: Are there any rulings or court cases relating to the retention of records in terms of the Income Tax Act?

A: We are not aware of any tax related court cases where the retention of records in terms of the Income Tax Act was considered.  We don’t know what your specific issue is, but submit that if there was it may not be that relevant.  The reason is that the Tax Administration Act now applies, even in respect of matter before is effective date, and any dispute may have to be determined in terms thereof. 

Section 29 of that Act deals with the duty to keep records and reads as follows:

A person must keep the records, books of account or documents that -

(a)    enable the person to observe the requirements of a tax Act;

(b)   are specifically required under a tax Act or by the Commissioner by public notice; and

(c)    enable SARS to be satisfied that the person has observed these requirements.

(2) The requirements of this Act to keep records, books of account or documents for a tax period apply to a person who—

(a)    has submitted a return for the tax period;

(b)   is required to submit a return for the tax period and has not submitted a return for the tax period; or

(c)    is not required to submit a return but has, during the tax period, received income, has a capital gain or capital loss, or engaged in any other activity that is subject to tax or would be subject to tax but for the application of a threshold or exemption.

(3) Records, books of account or documents need not be retained by the person described in—

(a)    subsection (2)(a), after a period of five years from the date of the submission of the return; and

(b)   subsection (2)(c), after a period of five years from the end of the relevant tax period. 

Section 30 deals with the form of records kept or retained and section 31 with inspection of records.  Please also note that section 32 deals with the retention period in case of audit, objection or appeal. 

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. 


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