It is almost certain that you will experience a dispute regarding the SARS facts and laws surrounding a transaction would occur between yourself and SARS at some stage. As you may or may not be aware, SARS follows the ‘Pay now argue later a principle which is firmly embedded in section 164 of the Tax Administration Act This has the effect that should you dispute a portion of your tax liability by objecting to your assessment as calculated by SARS, you would still have to pay the disputed tax while waiting for the dispute to be sorted out and it can take more than a year for some disputes to be resolved.
Let’s say it took over a year to resolve the above dispute and against all odds you’ve lost the dispute. As any person would know, a year is a very long time in the business world. Despite the fact that the suspension of payment protected your business’ cash flow, your business is struggling and you literally cannot make ends meet by quite some margin. Now you are faced with a major tax debt that must be paid in order to prevent SARS from applying for a civil judgement against you, which could signal the return of all those headaches. You don’t know what to do and suddenly it comes to mind, I must call my SAIT-registered tax professional.
Through an instalment payment agreement, a senior SARS official may allow you to pay the outstanding tax debt in either a series of instalments or in one sum but only after a period of time. Should you believe that the prospects of your business may not pick up in the foreseeable future, then you may be requested to provide security for the outstanding tax debt before SARS would be willing to enter into the instalment payment agreement. Should SARS enter into the agreement with you, you’ll need to strictly comply with the agreement as non-compliance would lead to SARS terminating the agreement and instituting collection procedures for the tax debt.
On a heavier note, if you’re business is in serious trouble, then as a last resort it may be worthy to request that SARS compromise your tax debt which would lead to a permanent write off of the whole outstanding sum or a portion thereof. It is important to note that such an application may be a lengthy one with various supporting documents. In this regard it is strongly advised to make use of a tax professional when applying for this remedy. You should also take note of the fact that SARS is in the business of collecting taxes and would only enter into a compromise if it would be to its own benefit.
PR Niven’s tax professionals are highly trained and are legally bound to continuously maintain and enhance their tax knowledge through continuous professional development to ensure that only the highest standard of services are delivered to you.