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Before you apply for an ATR, check your activity isn't listed on the exclusion list

by , 10 July 2013
An Advance Tax Ruling (ATR) is a ruling SARS grants you if there're no tax laws in place for a particular transaction or project you want to start and if you're uncertain as to how the Tax Act will apply. But if you apply for an activity that's on the exclusions list, SARS won't proceed with your application. Save yourself that hassle by discoing the types of business activities you can't apply for...

ATR is a process whereby you can find out exactly how SARS will tax a certain transaction that's yet to happen. This will give you clarity on how you can proceed.

Although this is the case, before you apply for an ATR, it's important to check your transaction isn't listed on the mandatory exclusion list.

If it is, don't send your application as SARS won't proceed with it.

Don't apply for an ATR if your activity is on this exclusions list

According to the Practical Tax Loose Leaf, the mandatory exclusions apply to an application if it requests or requires a specific ruling for any of the following:

  • The market value of an asset;
  • The pricing of goods or services supplied by or rendered to a connected person;
  • The constitutionality of any tax law;
  • Transactions that are hypothetical or not seriously contemplated at the time the application is filed;
  • Your duty to determine if a person is an independent contractor, labour broker, personal service company or a personal service trust;
  • Academic inquiries;
  • The application or interpretation of a general or specific anti-avoidance provision;
  • A matter which would be unduly time consuming or resource intensive to resolve;
  • Requesting SARS to rule on the substance of a transaction and disregard its form; or alternative courses of action you can take.
  • Requesting SARS to rule on the subject of draft legislation; and
  • Requesting for a ruling on a matter that's pending before the courts or identified in the commissioner's 'no rulings' list.

There you have it. Always check your transaction isn't listed on the mandatory exclusion list before you apply for an ATR if so you don't send SARS an application in vain.



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