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How can I request SARS to reduce or write-off my tax debt?

Tuesday, 03 March 2015   (0 Comments)
Posted by: Author: SAIT Technical
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Author: SAIT Technical

Q: A client of mine operated a business until very recently but had to give it up because the business no longer proved to be financially viable. Currently she has no income of her own and she owes SARS some VAT.

Taking into account her current financial position, I was wondering whether there exists any channel through which negotiations could be initiated to reduce the overall tax debt in this regard. Under what conditions would the tax legislation allow for the reduction or write-off of a tax debt?

A: Section 200 of the Tax Administration Act (TAA) allows a taxpayer to approach SARS and request that the full or portion of an outstanding tax debt be "compromised”. Section 201 TAA sets out that the request must be in writing and must contain all the details stated in that section.

SARS will then consider the request per the guidelines in section 202 and the prohibitions in section 203 TAA. Should SARS agree to partially or in full compromise the tax debt a written agreement will be entered into and the taxpayer should ensure that she can meet the terms thereof, including any payment terms, otherwise SARS may not be bound to the terms and proceed to elect to recover the original debt per s205 TAA.

The request should be submitted to the local branch for consideration. Should SARS not respond or provide any correspondence as to them having received and considering the request, please follow-up with the call centre within 21 days or contact us to escalate the matter to SARS debt management in the region where the taxpayer is situated.

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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