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Nine vital points you need to know about a tax debt compromise

by , 22 September 2014
If your company is in financial distress, you can ask SARS to park your outstanding tax debt. This is called a tax debt compromise.

If SARS agrees to the tax compromise, it means it won't demand payment. It will treat your debt as no longer due or payable.

But whether SARS will park all or only a part of your company's tax debt will depend on your financial situation and how much it can realistically recover from your company.

While this brief explanation may sound simple enough, there's so much more to a tax debt compromise that you need to know.
 
The good news is, today, we're going to tell you all about this process so you can use it to your advantage and escape SARS penalties if your company is battling with tax debt.


Here are the nine points you MUST know about a tax compromise
 

Point #1: If you're battling with tax debt, you need to know these four things about a tax debt compromise.

Point #2: There are three steps you must follow when preparing to lodge an application for a tax debt compromise.

Point #3: There are eight pieces of information you must gather when requesting a tax compromise.

Point #4: If you answer 'no' to these six questions, SARS will accept your tax debt compromise application.

Point #5: Here's what will happen after SARS agrees to compromise a tax debt.

Point #6: If your tax debt compromise application is successful, three things will happen before finalisation occurs.

Point #7: Just because your tax debt compromise was successful, doesn't mean you're off the hook!

Point #8: There are consequences to a tax debt compromise.

Point #9: There's recourse if SARS rejects your application for a tax debt compromise.

Now that you know these nine points about a tax debt compromise, take advantage of it if your company is struggling with its tax debt.

PS: If you're still not sure how this process works, check out Tough Tyres's story. It will help you understand the tax debt compromise process. Alternatively, ask our experts at the Accounting & Tax Club any question you have about a tax debt compromise.
 



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