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What to do if you disagree with a SARS assessment

by , 22 May 2013
If you're unhappy with SARS' assessment for your company, don't sit back and take it. SARS also makes mistakes. And the law actually allows you to contest a decision they've made. But, how does your company go about doing this? Read on to find out...

Many taxpayers feel powerless against SARS. They think a decision made by SARS is always correct.

Well, it's not. SARS can make mistakes. And when it does, the law is on your side.

In fact, if you have a dispute under any one of the following Acts you can dispute decisions and assessments made by SARS if you think they're wrong. The dispute resolution procedures are applicable to nine taxes imposed under the different Acts, including:

  1. Income Tax Act, (including PAYE, donations tax and capital gains tax);
  2. Transfer Duty Act,
  3. Estate Duty Act,
  4. Value-Added Tax (Vat) Act
  5. Skills Development Levies Act,
  6. Securities Transfer Tax Act,
  7. Securities Transfer Tax Administration Act,
  8. Unemployment Insurance Contributions Act, and
  9. Voluntary Disclosure Programme and Taxation Laws Second Amendment Act.

So if your company disagrees with an assessment by SARS, you can request, in writing, the reasons why.

For example, if SARS hasn't allowed your deduction, ask under which section of the Act it's disallowed this deduction.

But before you do, there's a specific format your company must use to lodge its objection.

Three things you must do to lodge your objection

  1. Complete your objection on the Notice of Objection form (NOO1).
  2. Deliver it to SARS, at the address specified in the assessment within 30 days of the date of assessment. 'When you submit your objection, you must include a letter stating your reasons for filing you objection,' says The Practical Tax Loose Leaf Service.
  3. Always get the documents you hand deliver date stamped and keep a copy. The date stamp, registered post receipt and fax reports will be your backup to prove the date of submission if SARS says it didn't receive your company's objection.

It's important that you get SARS' reasons for the assessment before your company makes an objection. You must do this within 30 days of the assessment date. SARS then has 60 days to respond with any reasons it may have.

If your objection is based on an assumption that turns out to be wrong, SARS will disallow your company's objection. So it's crucial you refer to SARS' reasons when objecting, prove they were wrong and then tell SARS what the correct application of the tax law is.

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