The 2023 tax season comes with some fresh rule changes around tax disputes, and in this article, we aim to help you understand these new guidelines.
Tax season can be a daunting time for individuals and businesses as they engage with the South African Revenue Service (SARS) to ensure compliance. To simplify the process and offer clarity, SARS has introduced a set of new rules. In this article, we will provide an accessible breakdown of these guidelines, helping you understand how to effectively challenge SARS and resolve tax-related issues.
New Regulations:
To enhance the taxpayer experience and provide clear guidelines for challenging SARS, new regulations have been implemented. These regulations address common concerns and offer a streamlined process for dispute resolution.
Electronically Submitting Objections:
One notable change is the shift towards digital channels for objections and disputes. Physical mail is no longer accepted for handling disputes. Under the new rules, objections must be submitted electronically through the taxpayer's filing page on the official SARS website). This transition streamlines the process and ensures that all necessary steps are followed, avoiding potential delays caused by incomplete submissions.
Advantages of Digital Submission:
The transition to digital submission offers several benefits. It allows SARS and tax practitioners to have a comprehensive view of a taxpayer's financial affairs without relying on manual processes, resulting in faster dispute resolutions. Furthermore, digital submission facilitates efficient tracking and management of objections, benefiting both taxpayers and SARS.
Extended Time Periods:
Under the new rules, parties (taxpayers or SARS) can agree to shortened time periods for various procedures if they are not already regulated. Previously, only extensions were allowed. This flexibility in timeframes aims to expedite the resolution process by reducing unnecessary delays.
Notice of Objection (NOO):
Taxpayers must submit a notice of objection within 80 days from the date of the assessment, an extension from the previous 30-day deadline. If the taxpayer requested reasons for the assessment, the NOO must be submitted within 80 days from receiving the SARS notice containing adequate explanations or the SARS letter addressing the requested reasons. In exceptional circumstances, an extension of up to three years may be granted.
Appeal on New Grounds:
Under the new rules, taxpayers can appeal on new grounds not previously raised in the notice of objection, except when objecting to a part of the assessment that was not previously challenged. This provision allows taxpayers to present additional arguments or evidence during the appeal process, supporting their case more effectively.
Alternative Dispute Resolution (ADR) Facilitator:
If a dispute cannot be resolved through regular channels, taxpayers and SARS can appoint an ADR facilitator. The facilitator should possess appropriate tax experience and be acceptable to both parties. They act independently and impartially, mediating the dispute and striving to find a resolution. The facilitator is required to deliver reports within specified timeframes after the conclusion of the ADR process.
New Grounds and Statements of Assessment:
SARS is obliged to provide a statement explaining the rationale behind their assessment and their opposition to an appeal. They have the ability to add new grounds for disallowing an objection, unless it significantly alters the basis of the assessment or requires a completely new assessment to be issued. This provision ensures transparency and provides taxpayers with a clear understanding of SARS' position.
Subpoenas and Witnesses:
In the pursuit of a fair resolution, the new rules allow individuals to be subpoenaed by the Tax Board or Tax Court to attend an appeal and provide relevant evidence or documents. If a party believes that a subpoena is irrelevant or unreasonable, they can seek relief from the Tax Court. This provision ensures that all necessary information can be presented during the appeal process, aiding in a thorough examination of the case.
SARS' Information Page:
To further assist taxpayers during the upcoming tax season, SARS has updated its information page. This page serves as a valuable resource, providing helpful guides and step-by-step instructions on how to navigate the tax filing process. It offers comprehensive information on various aspects of tax filing, such as deductions, exemptions, and deadlines. Utilising this resource can help taxpayers ensure accurate and timely submissions, reducing the likelihood of errors and potential disputes.
As the tax season approaches in South Africa, understanding the new rules implemented by SARS for challenging taxes is essential for all taxpayers. By familiarising yourself with the guidelines, such as electronically submitting objections, adhering to extended time periods, considering alternative dispute resolution options, and being aware of changes in grounds and statements of assessment, you can effectively engage with SARS and resolve any tax-related issues that may arise. With a clear understanding of the rules and procedures, you can navigate the tax season with confidence and peace of mind.
