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7 ATR requests that qualify for discretionary exclusion

by , 10 November 2015
An Advanced Tax Ruling (ATR) is something that SARS will grant you if there are no tax laws in place for a particular transaction or project that you want to start.

But, when you apply for an ATR it's worth noting there are certain circumstances or requests whose exclusion is discretionary.

While the law doesn't require the Commissioner to reject certain applications, it doesn't stop him from doing it either.

Here are 7 requests and circumstances that could qualify for a discretionary exclusion:

1.     Material facts for an issue that can't be established at the time of application. In other words, this can be when any part of a transaction is still uncertain, and you ask SARS to clarify on how it will treat the transaction for income tax purposes. An example could be the timing of receipts on complex manufacturing machinery.
2.      An issue that relies on assumptions for a future event. In other words, it can't be reasonably determined at the time of application.
3.      An issue that would be better dealt with by the authorities of the parties to an agreement to avoid double taxation.

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4.      A request for a ruling on a similar issue that you have already received a ruling for.
5.      You fail, or refuse, to provide information that has been requested by the Commissioner.
6.      The application and interpretation of a foreign law.
7.      A matter that can be resolved by SARS under the Fourth and Seventh Schedule of the Income Tax Act.

So, there were 7 requests that can qualify for discretionary exclusion. Now take careful note of them BEFORE applying for an Advanced Tax Ruling.

To find out more on discretionary exclusions on ATRs, subscribe to the Practical Tax Loose Leaf Service.


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