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Highlights from the SARS National Stakeholder Meeting held on 4 November 2014

Friday, 12 December 2014   (0 Comments)
Posted by: Author: SAIT Technical
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Author: SAIT Technical

1.       Power of attorney (POA) forms

The recognised controlling bodies (RCBs) mentioned that it is problematic for tax practitioners to have their clients update their POAs every 2 years as required by SARS; especially given the large numbers of clients of some practitioners. It was admitted by SARS that their practice of only allowing POAs with a lifespan of 2 years is not supported by law. They committed to investigating this issue and providing feedback at a later date.

2.       Senior SARS official list

SARS has assured the RCBs that the list will soon be made available, especially considering a new Commissioner was recently appointed. 

3.       Printing of returns on e-Filing

The RCBs were informed by SARS to send a list to them of the various returns that cannot be printed before they are filed, so that this can be remedied as soon as possible. We therefore urge our members to provide the SAIT with feedback in this regard. 

4.       Documents saved on e-Filing

There are a lot of documents currently saved by taxpayers on e-Filing but not yet submitted to SARS. These documents take up an enormous amount of space. SARS have informed the RCBs that all such documents will be deleted from e-Filing in the not-too-distant future. The RCBs will be notified by SARS prior to the deletion, so that practitioners can be warned.  

5.       Automatic income tax registration for newly formed companies

SARS confirmed that they are currently working together with the Companies and Intellectual Property Commission (CIPC) to ensure that when a company is registered with CIPC, a tax number gets allocated to that entity within a short space of time (usually a week). Tax practitioners who go to a SARS branch to register a newly-formed company for income tax will find sometimes that the company has already been registered. It is the intention of SARS that in future, all companies will be registered for income tax this way.

However, as this process is only in the beginning phase, it is not happening with each and every company registration

6.       E-Filing deferral of payment and request for reasons functionalities 

The RCBs have requested that a functionality for the ‘request for reasons of an assessment’, as contemplated in Rule 6 of the Dispute Resolution Rules, be made available on e-Filing. The same request was made regarding an e-filing facility for payment deferrals. SARS have expressed that they want these facilities to be automated and are currently working on this. It was stated that the ‘request for reasons’ facility would be on e-filing sometime during early 2015.

7.       Status of SARS service charter and turnaround times

SARS initially released the SARS Service Charter on the 19th of October 2005. This document performed an important function in ensuring that SARS performs its functions within agreed standards. The RCBs pointed out to SARS that the document is no longer available on the SARS homepage and urged SARS to return it. SARS stated that it is currently being finalised to bring it up to date with recent legislative and operational developments. However, a date was not given as to when the updated version would be made available. 

8.       SARS Escalation process

SAIT raised the issue that the escalation process within SARS is currently flawed. After going through the normal internal channels to attempt to deal with a problem (up to SSMO level), taxpayers are entitled to approach the Tax Ombud. Branch managers insist, however, that the queries be escalated to them before being referred to the Tax Ombud. Additionally, there are escalation lists that SARS has provided to the RCBs upon request. Tax practitioners have had good results with the help provided by the SARS officials thereon, but this all adds to the waiting period for resolving cases and is particularly unhelpful for those in dire straits. 

SARS have stated that a new complaints management system will be launched early in 2015 that will clarify the process.

9.       Different policies at branches/consultants

The RCBs noted inconsistencies in how certain issues are dealt with at different branches or by different consultants at the same branch. SARS stated that they have clear operational policies which are available online and should there be a deviation from those policies, the relevant ops executives can be contacted to address these matters.

10.       SARS requirement to register as a foreign company

The RCBs have further pointed out that SARS requires foreign-incorporated entities to register as "external companies” with CIPC. It was requested of SARS that this requirement be withdrawn as it may result in unnecessary complications. Furthermore, there is no basis for this requirement in the legislation. SARS have stated that an alert may be issued on this once the situation is rectified. 

11.       ITR12 not fully catering for the section 10(1)(o)(ii) exemption

The ITR12 return does not fully cater for the exemption provided by section 10(1)(o)(ii) of the Income Tax Act (No. 58 of 1962) (‘the Act’). In the Wizard section where the number of days must be entered, one only has the option to enter the number of days outside of South Africa for the 2014 and prior years of assessment. This may, however, lead to practical problems where the taxpayer only satisfies the 60 continuous day and 183 days requirement after 28 February 2014. 

The problem therefore is that the ITR12 return is referring to ‘years of assessment’ rather than any ‘period of 12 months’. The section 10(1)(o)(ii) exemption works according to any period of 12 months and must be apportioned if its requirements are met over two years of assessment. The SARS Call Centre then advises taxpayers/tax practitioners that they would need to object to the assessment if the section 10(1)(o)(ii) exemption was not calculated correctly.

This, however, is impractical and a simpler solution would be to amend the return to refer to any period of 12 months and to therefore align the return with the criteria of section 10(1)(o)(ii).

SARS noted that this matter is very difficult to deal with from an operational standpoint and that it will be tackled next year. 



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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