Our experts reveal three vital facts about SARS tax audits
Benjamin Franklin once said: Nothing is certain but death and taxes. Perhaps, the famous scientist and inventor should have also included SARS audits! This because no business is immune to them.
SARS has the power to audit you at any time, without notice.
That's why it's important to know the ins and outs of SARS tax audits.
Here are three important facts about SARS tax audits. Familiarise yourself with them so you can reduce your risk of an audit and also safeguard your rights.
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Three MUST KNOW facts about SARS tax audits
Fact #1: SARS'll audit you should they need more information or feel you're withholding something
The Practical Tax Loose Leaf Service says when SARS officials carry out the audit, they have a right to:
Open anything they believe contains relevant material;
Seize any relevant material;
Seize and retain a computer or storage device in which relevant material is stored, for as long as it's necessary to copy the material required; and
Take extracts from, or make copies of, relevant material.
Fact #2: You have rights when it comes to SARS tax audits
While SARS has the power to audit you at anytime, but it doesn't mean they can knock your door down.
You still have rights.
For starters, SARS must notify you of the audit at least 10 days before they show up.
In this article, we explained that a SARS official must notify you about the following:
The venue, date and time (which must be during business hours) when they'll start the audit. If that date's isn't suitable for you (such as if it's month end, year-end or your accountant is off on maternity leave), let SARS know five days before they're due to arrive to change the date of the visit.
What they're coming to check. They must say what tax period they want to see records for and if they're checking output tax, input tax or both.
There's one more important fact you need to know about these impromptu tax audits. And it's all about how you can reduce your risk of an audit.
Every South African tax law explained by our experts
The Practical Tax Loose Leaf Service offers you:
All the definitions and legal regulations, useful advice, exceptions to the rules that help you slip through the legislative jungle of taxes.
Case studies and practical examples that show you what elements you should consider for your taxes to be perfect.
Red flags you need to watch out for and the penalties you'll face if you don't respect them.
Sample templates at your disposal, ready to be filled in, customised and printed.
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Fact #3: You can reduce your SARS tax audit risk if you do these six things
Keep a good financial/credit record;
Don't miss any due dates;
Meet all your obligations in terms of income tax, PAYE, Vat, etc;
Disclose your income correctly on your annual tax return;
Stay up to date with tax legislation; and
Ensure you issue Valid tax invoices.
There you have it: We hope these important facts will help you safeguard your audit rights and reduce your risk of a nightmare SARS tax audit.
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