How an ATR from SARS could keep you clear of tax penalties
Our new tax ombud, retired Judge Bernard Ngoepe, has resolved his first case already, one involving Vat. He's pleased with this positive start he's gotten off to, and he's quick to point out that his role is to deal with service issues, not with issues of tax law interpretation.
If, on the other hand, you need clarity on your interpretation of tax law, you can ask SARS for an Advance Tax Ruling (ATR). It's when you write to SARS, explaining your situation and circumstances, and your interpretation of the tax law. And SARS will respond, either agreeing with your interpretation, or giving you guidance on the correct interpretation.
An ATR is also useful if you're dealing with a unique transaction, and there's no law in place for it yet. The ATR allows you to find out how SARS would like you to deal with the transaction before you take any action.
The experts at the Practical Tax Loose Leaf
explain how to apply for an ATR.
Follow these ten simple steps to follow to apply for an Advance Tax Ruling
Step #1: Register on eFiling
. Click on 'eFiling Services' and then on 'Other Services' to find the link to ATRs. If you get stuck, you can contact the SARS ATR Unit on tel (012) 422 4902.
Step #2: Complete the online Binding Private Ruling (BPR application form and the pre-screening checklist
The pre-screening checklist is a tool to help you determine if your application is subject to a mandatory or discretionary exclusion. If your answer to a question indicates that exclusion may apply, an information box will appear that identifies the potential problem and provides you with a link to a site where you can get additional information.
Step #3: Complete your contact details and other basic information
If you've successfully completed the pre-screening checklist, then give SARS all your details,
You'll have to submit a statement that you're not currently the subject of an audit, investigation, objection or appeal and aren't facing legal proceedings, as a result of the issue you have raising in your application.
You also have to declare that your tax affairs are in order and you don't have any tax returns outstanding.
Finally, you must give consent to the publication of the ruling (since SARS publishes all the rulings on its website, etc).
Step #4: Pay the application fee in full
This is a fee of R10 000 (or R2 500 for SMMEs). Your application won't be accepted until you've paid the fee in full.
Step #5: Receive a confirmation and a reference number
Step #6: Supply SARS with relevant supporting documents
Do this via eFiling, within five days of submitting your application.
Step #7: Review of application by SARS
Step #8: Get feedback from the ruling specialist
Five days after you've submitted all the documents and the application, you'll be notified of the acceptance or rejection of your application.
Your ruling specialist will also provide you with an estimate of the anticipated cost-recovery fee that will be charged in connection with the application.
Step #9: Accept and pay the estimated cost recovery fee
You have to accept the estimated fee – and pay 20% of the fee in advance – before SARS'll get started with your ruling.
Step #10: Sign the letter of engagement
You can monitor your status by logging into SARS eFiling or you can email ATRInfo@sars.gov.za
There you have it – the exact steps you'll need to apply for an ATR.
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