The date of a particular assessment is not the date on which payment should be made by the taxpayer, but the day on which SARS determines the payable amount. The facts of First South African Holdings (Pty) Ltd v CSARS were that SARS issued an assessment on 17 July 2003 based on incorrect information supplied by the taxpayer. On 12 April 2006 SARS issued an additional assessment disallowing an assessed loss that was allowed in the original assessment. In a letter dated 24 July 2007 the taxpayer alerted SARS to the incorrect assessment issued in 2003 and requested SARS to correct the error under s 79A. Although SARS agreed with the taxpayer that the 2003 assessment was incorrect, it refused to correct this assessment on the basis that it only had the authority to do so under s 79A three years from the date of the original assessment. The taxpayer argued that the three-year period ran from the date of the original assessment and not from the date of the additional assessment.
(Editorial comment: It should the noted that s 79A does not refer to the term "date of assessment", but to "date of that assessment". Unlike the former, "date of that assessment" is not defined in s 1. As a result it was up to the Court to decide the meaning of the term. The Court held that an assessment is made when SARS determines the liability for tax. On the facts of the case the Court decided that it occurred on 17 July 2003 and not on the date when the additional assessment was issued.
The representative of the taxpayer is of the opinion that this decision is contrary to the meaning of the term "assessment" as used by SARS. He stated in a media release that he is taking the issue directly to the Constitutional Court.
Section 240A of the Tax Administration Act, 2011 (as amended) requires that all tax practitioners register with a recognized controlling body before 1 July 2013. It is a criminal offense to not register with both a recognized controlling body and SARS.
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