Are there any rulings or court cases dealing with the retention of records?
17 April 2015
Posted by: Author: SAIT Technical
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
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 -
enable the person to observe the requirements of
a tax Act;
are specifically required under a tax Act or by
the Commissioner by public notice; and
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—
has submitted a return for the tax period;
is required to submit a return for the tax
period and has not submitted a return for the tax period; or
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—
subsection (2)(a), after a period of five years
from the date of the submission of the return; and
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.