Remedies if requested to prove submission of returns more than 10 years ago
29 June 2015
Posted by: Authors: Nina Keyser, Joon Chong and Nirvasha Sing
Authors: Nina Keyser, Joon Chong and Nirvasha Singh (Webber Wentzel)
In recent weeks, SARS requested a particular taxpayer to prove that it had submitted tax returns relating to years of assessment more than 10 years ago. This is not an isolated incident as we have seen a number of similar requests of late. In one of the cases, the taxpayer had a current tax clearance certificate. This would normally indicate that SARS believes all returns are up-to-date.
Generally, taxpayers are required to retain their records for a period of five years from the date of submission of a return. If no return was submitted, there is an obligation to retain records indefinitely. Therefore, from SARS' perspective, if its system shows that a return is outstanding, it can ask for the return regardless of how long ago the return was due.
Given that SARS seems to be asking for returns which should have been submitted more than five years ago, we recommend that taxpayers obtain from SARS comprehensive statements of account and records of returns submitted for all possible taxes going back as far as possible.
If any of these statements or records reflects that a return has not been submitted, the taxpayer has the following options:
- submit a copy of the return, if one is available;
- submit a copy of the assessment of that return, if one is available;
- submit a statement of account which reflects an assessment of that tax for that period (which would generally indicate that a return has been submitted);
- if it transpires that no return was submitted, make use of the voluntary disclosure programme (VDP) to submit the return. The taxpayer is entitled to make an estimate when submitting an application under the VDP, provided all available material facts are disclosed to SARS.
This article first appeared on webberwentzel.com.