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FAQ - 17 August 2016

Wednesday, 17 August 2016   (0 Comments)
Posted by: Author: SAIT Technical
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Author: SAIT Technical

1. Would the period of limitations apply to a taxpayer where SARS is asking for VAT returns for the 2011 and 2012 tax years? 

Q: A VAT query arose which led to SARS requesting missing VAT returns for 2011 and 2012 even though the payments of VAT for those periods reflect. At the time, the returns must have been manually submitted as we can see payments but new owners have no copies of those returns. 

A: We accept that the reference to "the period of limitations” is a reference to section 99 of the Tax Administration Act.  As this is an instance of self-assessment for which a return was required, SARS may not issue an assessment five years after the due date of the original assessment.  On that basis the period of limitations for the 2012 returns (and some 2011 ones) may well not be past.  

The vendor had the duty to keep the relevant records.  If the returns were submitted, amongst others, to prove that.  If the returns were not submitted the period will only start when the assessment is issued.  

The problem with your suggestion, to use the financial statements is that SARS would then refuse the input tax deductions, in the first instance because the tax invoices are not available, and then also where they are older than 5 years.  

It is one of the risks of taking over a company – the company has the duty, through its public officer, and the fact that the membership was sold is irrelevant.  

2. When can SARS request information?

Q: How does a current tax practitioner deal with any potential SARS audit going back 5 years if the client file records are handed over to a new tax practitioner appointed by a client?

A: In terms of section 46 of the Tax Administration Act, a request (by SARS) for relevant material to a third party is limited to material maintained or kept or that should reasonably be maintained or kept by that person in respect of the taxpayer.  The taxpayer is ultimately responsible to answer the request for relevant material.  We suggest that you respond to the SARS request by explaining the position and provide them with the information that you do have.  

3. Can a VAT registration be back-dated?

Q: Client started business in May 2015. VAT registration was done on July 2016. SARS rejected all the VAT201 from 2015 05 stating invoices needs VAT number displayed. If a new business is registered for VAT after it started operating, should the VAT number be displayed on the invoices, even if he didn't have the VAT number at that date?

A: We are not sure why the registration was backdated to May 2015 – we accept application was made under section 23(1)(a) of the Value-Added Tax Act.  

The relevant requirement for a valid tax invoice, in this instance, is that it should contain the name, address and, where the recipient is a registered vendor, the VAT registration number of the recipient – see section 20(4)(c).  For invoices under R5 000 it is not a requirement.  

We submit that the fact that the Act refers to a ‘registered vendor’ (the emphasis on ‘registered’) implies that where the vendor was not so registered at the time of the supply, the registration number is not required.  You will have to use this as your ground when you object to the VAT217.

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. 



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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