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FAQ - 22 June 2016

21 June 2016   (0 Comments)
Posted by: Author: SAIT Technical
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Author: SAIT Technical

1. What channels can be used to dispute the findings in a diesel dispute?

Q: Are sections 77A to 77H of the Customs & Excise Act the only channel through which the SARS findings in a diesel audit can be disputed? Do sections 104 & 107 of the TAA not apply to Customs & Excise?

A: According to the definition in section 1 of the Tax Administration Act, ‘tax Act’, as used in that Act, means this Act (i.e. the Tax Administration Act) or an Act, or portion of an Act, referred to in section 4 of the SARS Act, excluding customs and excise legislation.  

It is stated, on page 18 of the SARS Dispute Resolution Guide (Issue 1), that it "should be noted that the Customs and Excise Act, 14 the Customs Duty Act15 and the Customs Control Act,16 contain their own provisions relating to dispute resolution. 

The guide continues by explain that customs or excise disputes essentially comprise the following:

Internal Administrative Appeals (IAA)

If anyone does not agree with the decision of a Customs officer, they should firstly approach that officer’s immediate supervisors in order to clarify the decision in question and resolve any uncertainties. Should the matter not be resolved in this way, the person may institute a formal internal administrative appeal.

Internal Administrative Appeal (IAA) Process

In cases where clients are not satisfied with any decision taken by officers in terms of the Customs and Excise Act, they have a right of appeal to the relevant appeal committee. Appeals must be lodged on a Form DA51 at the office where the decision was made and must be delivered to the manager of the office head of Division in Head Office within 30 days of the date of the decision. Alternatively, where reasons for a decision were requested, within 30 days from the date they were advised that sufficient reasons had already been provided or within 30 days from the date the reasons were, in fact, provided. Should clients be unhappy with a decision of any appeal committee, their recourse will be to lodge an application for Alternative Dispute Resolution (ADR) with that relevant appeal committee which made the decision.

Alternative Dispute Resolution (ADR)

In addition to the IAA process, provision has also been made for an ADR process, which can be used as recourse against a final decision made under the IAA process or as an alternative to litigation. It is important to note that no extension may be given to the 30 day period (as mentioned above) and, should it be exceeded, the IAA process cannot be followed and the applicant’s recourse will then lie in litigation.  ADR may, however, be offered as part of the litigation process. In the event of an appellant wishing to dispute a determination made by a Customs Appeal Committee, their recourse lies in litigation. Alternatively, they can request that the matter be considered for the ADR process, as a final resort prior to litigation. To apply for ADR, a properly completed Form DA52, together with the relevant supporting documents, must be submitted to the person who informed them of the decision within 30 days of the date of the letter.

2. When will an individual no longer be resident in South Africa?

Q: A taxpayer has not officially immigrated but has been overseas and earning income with no intention of coming back. From when do i start treating the taxpayer as a non-resident? He is now resident overseas.

A: A person will no longer be a ‘tax resident’ of the RSA if her or she ceases to be ordinarily resident in the RSA or if he or she is deemed to be exclusively a resident of another country for purposes of the application of any agreement entered into between the governments of the RSA and that other country for the avoidance of double taxation.  

The 330 days (mentioned in the definition of resident) is only relevant to a person who was deemed to be a resident of the RSA.  

The notice for the 2016 year of assessment requires that a natural person must furnish an income tax return if the person is someone: 

(d) (i) who carried on any trade in the RSA (other than solely in his or her capacity as an employee);

(ii) to whom an allowance or advance was paid or granted as described in section 8(1)(a) of the Act (other than an amount reimbursed or advanced as described in section 8(1)(a)(ii)) and whose gross income exceeded the thresholds set out in item (viii);  (R73 650, R114 800 or R128 500) 

(iii) who had capital gains or capital losses exceeding R30 000;

(e) every non -resident whose gross income consisted of interest from a source in the RSA to which the provisions of section 10(1)(h) of the Act, do not apply.  

The return is not required if the gross income of that person consisted solely of gross income described in one or more of the following subparagraphs:

(a) remuneration, other than an allowance or advance referred to in paragraph 2(d)(ii) above, paid or payable from one single source, which does not exceed R350 000 and employees' tax has been deducted or withheld in terms of the deduction tables prescribed by the Commissioner;

(b) interest from a source in the Republic not exceeding -

(i) R23 800 in the case of a natural person below the age of 65 years; or

(ii) R34 500 in the case of a natural person aged 65 years or older; and

(c) dividends and the natural person was a non-resident throughout the 2016 year of assessment.  

The amounts differ slightly for the 2015 year of assessment.  

3. What are the implications of a non-resident beneficiary of a South African trust?

Q: A natural person who is emigrating is currently a beneficiary and trustee of a South Africa trust. Will there be an implication be for the non-resident? Will this non-resident be allowed to deactivate their tax number due to emigration reason? 

A: The fact that the individual is a trustee of a resident trust, on its own, has no influence on the tax registration of the person as a taxpayer.  Ordinarily a beneficiary would only have to register if the trustees vested amounts.  

The Tax Administration Act or the Income Tax Act doesn’t deal with the de-registration of a taxpayer.  Section 23 of the Tax Administration Act requires of a person registered at SARS to communicate to SARS any change that relates to postal address, physical address; representative taxpayer; banking details or other detail that SARS may require.  

In terms of the notice to furnish returns (the 2016 one) every individual whose gross income exceeded certain amounts must furnish a return.  In terms of the notice to furnish returns (the 2016 one) every non-resident individual whose gross income consisted of interest from a source in the RSA to which the provisions of section 10(1)(h) of the Act, do not apply; or the representative taxpayer of that person must furnish a return.  SARS will probably not ‘deactivate’ (as you say) a taxpayer if there is an expectation that the person will still derive amounts from the RSA. 

Disclaimer: Nothing in these queries and answers 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 answers, SAIT do not accept any responsibility for consequences of decisions taken based on these queries and answers. It remains your own responsibility to consult the relevant primary resources when taking a decision.  


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