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How to object a SARS tax assessment the right way

by , 08 February 2013
Businesses are in for a challenging time from SARS. The Eurozone debt crisis is having an impact on economic growth in South Africa. Because Europe is our largest trading partner, our economy's growth is affected every time there are problems in the region. And with lower economic growth here in SA thanks to the Eurozone crisis, SARS needs to do whatever it can to get money from every possible place. The result: you're your business could face a hefty tax penalty if SARS finds fault with your tax assessments. Use these four steps to object a SARS tax assessment that you think is unfair and get off with a lighter tax assessment if your objection is successful.

Globally, tax authorities are becoming more aggressive when it comes to following up on business tax.
And locally, there's been an increase in tax audits and disputes.
SARS is under strain to intensify its tax collections from a smaller pool of taxpayers, said KPMG corporate tax director Roula Hadjipaschalis on Fin24.
And that means, SARS will continue to audit large corporate taxpayers regularly.
In fact, the Tax Administration Act now gives tax authorities invasive powers such as search and seizure of documents without a warrant and 'criminal sanctions on not providing information timeously,' says Moneyweb.
But what can you do if you feel SARS was unfair or inaccurate in assessing your business' tax?
Here's a way to object to any tax assessment SARS imposes on your business without facing jail time, according to Natalie Cousens of  the Tax Bulletin.
You'll need to follow these four steps to object to a tax assessment from SARS:

1. Make sure you know why SARS penalised you – you must ask for a reason within 30 days of the tax assessment.
2. Complete an ADR1/NOO form within 30 days of hearing from SARS, and attach a letter of objection.
3. Get a unique reference number from SARS to keep track of your tax objection.
4. Make sure SARS responds within 60 days if it needs more information from you.
SARS will then let you know in writing within 60 days if your tax objection was successful. If so, SARS will issue you with a reduced tax assessment.

Follow these four steps if you object to SARS' assessment of your business tax and you could get off with a lighter tax assessment.

If you want more inforamtion on SARS' search and seizure powers get your hands on the Practical Tax Loose Leaf. In the Practical Tax Loose Leaf we've a dedicated chapter on SARS' search and seizure powers, in it you'll discover:

  •  What is search and seizure and why does SARS have this power? 
  • 2 different types of searches SARS can perform
  • When SARS can search your premises without a warrant
  • Onus of proof is on SARS!
  • How to make sure SARS sticks to its own laws
  • What can SARS seize?
  • What to do if SARS infringes on your rights.
Get the Practical Tax Loose Leaf here...


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