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Directors of tax services firm not registered tax practitioners, but junior employee is registered

Thursday, 13 November 2014   (0 Comments)
Posted by: Author: SAIT Technical
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Author: SAIT Technical

Q: I have heard of instances where the directors of a firm offering tax services are not registered tax practitioners but the junior tax consultant is registered. Is it ethical for the directors to 'ride on the coat tails’ of the junior in order for them to continue offering tax advice?

A: It would seem as if the firm is relying on sec 240(2)(d)(ii) of the Tax Administration Act (No. 28 of 2011) (hereinafter ‘TAA’) to prevent the directors or senior consultant from registering. The said section states the following (emphasis mine):

‘(2) The provisions of this section do not apply in respect of a person who only—

(d) provides the advice or completes or assists in completing a return—

(ii) under the supervision of a registered tax practitioner who has assigned or approved the assignment of those functions to the person.’

Sec 240(2)(d)(ii) therefore contains a dual test. First of all the work of the non-registered directors must be performed under the supervision of the registered tax practitioner and the tax practitioner needs to assign or approve the functions that need to be performed by the non-registered members.

In terms of the normal master-servant principle, it is highly unlikely that a junior staff member would supervise and sign off the work of more senior staff members (not to mention directors of the firm). It is furthermore highly improbable that the junior employee would refuse to sign off work done by the senior personnel and accordingly refuse to submit the work performed to the client.

Even though the directors may factually be absolved from registering due to the application of sec 240(2)(d)(ii), the mandate of the different employees and directors would need to be investigated to determine whether there is a clear reporting line running up to the junior employee and whether the junior employee in fact signs off all of the work and accepts responsibility therefore in terms of sec 240(2A).

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.



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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