Drowning in tax debt? Don’t owe the South African Revenue Service (SARS) the tax liability they say you do? Perhaps you don't even know whether or not you have a tax liability due.
Deciphering tax assessments and managing tax debt can be overwhelming. SARS does, however, provide resources and channels through which you can gain a better understanding of your tax compliance status and tax liability. In addition, you can make certain applications or requests to SARS to manage your tax liability. We break these all down for you here.
In order to determine if you are up to date with your tax affairs, you can easily check your tax compliance profile via eFiling. We recommend that you do this regularly to ensure you have no outstanding submissions or payments which could result in the accrual of penalties and interest.
Non-compliance can result if you have outstanding tax returns which need to be submitted or debt that still needs to be paid. Creative CFO can assist by performing an analysis of your tax profile and providing you with a report of your tax compliance status.
On completion of the required tax submissions, SARS will issue yearly assessments (ITA34 for individuals and ITA34C for companies). These assessments depict the tax liability due, if any. If you do not understand how SARS derived this tax liability you can request reasons from SARS via eFiling within 30 days from the date of assessment.
If SARS notify you that you have been selected for verification or audit please don't panic! A verification is merely a face-value verification of the information declared in the return. An audit, however, is an examination of the financial information submitted to determine whether you have correctly declared the tax position to SARS. By its nature, an audit is a more extensive process than verification and the scope could be broader.
In both instances, it is important to ensure you submit the required information within 21 days of the SARS notice to avoid unnecessary penalisation.
Should you disagree with your assessment, you can object to SARS within 30 days from the date of the assessment (or from the date the written reasons are provided). The objection must specify in detail the grounds upon which it is made and must be in the prescribed Notice of Objection (ADR1) form. Creative CFO can assist you in compiling an objection in this prescribed form and submitting this to SARS.
Should SARS disallow the objection, taxpayers still have the right to appeal against such a disallowance.
If there is no disagreement about your tax liability but you are not in a financial position to settle the full amount owing immediately, you can request a deferred payment or compromise arrangement.
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