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Can you really trust SARS to dictate what input tax YOU can't claim?

by , 03 March 2015
I just came across a case where SARS raised an assessment on a motor dealership in Pretoria. And SARS' rationale for the assessment - it says 'many motor dealers make errors'. So it decided to carry out extensive audits on all motor dealers, and it found one to pick on - Pretoria East Motors.

So SARS reversed several of Pretoria East Motor's input tax claims including claims on all their second hand cars. That was worth over R5 million...

But the dealership wouldn't just accept SARS' assessment. They took the case to the Tax Court...

And they won on most of their objections bringing the assessment down to R1 million!

Don't just accept assessments and penalties from SARS. Read on to discover the two steps you can follow to make an objection when you don't agree with SARS' decision...

Let's first take a look at when you can make an objection.
You can make an objection if SARS:
  • Changes the figures , by an assessment, of your Vat return;
  • Decides not to allow an extension;
  • Makes a decision you don't agree with;
  • Doesn't give a refund;
  • Doesn't waive an administrative penalty;
  • Doesn't waive an non-compliance penalty;
  • Doesn't waive an understatement penalty; and/or
  • Aggrieves a vendor by its assessment.
If SARS wants to assess your Vat affairs or if you disagree with its findings, you can state your case, object to the assessment and reach a resolution. Read on to find out what you need to do…

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Two steps to follow if you disagree with SARS' decision or assessment
Step # 1: Check the notification
SARS must tell you it's going to raise an assessment. It must also give its reasons in writing.
When it does raise an assessment of your Vat affairs, check these reasons.
Step # 2: Make your objection
If you disagree with the assessment and the reasons SARS gave you, you can object.
Fill in the formal ADR1 objection form. Sign the form and deliver it to SARS or, submit it via e-filing. Make sure your objection is complete. If you skip a step, it delays the entire process!
And you have only 30 business days from the date of issue of the assessment to lodge your objection, so be sure to hand it in on time.
Don't let SARS boss you around. If it denies your input tax claim or raises an assessment you don't agree with, raise an objection!
For all you need to know about making your objection to SARS and increasing your chances of a successful outcome, turn to the Practical Vat Loose Leaf Service.
P.S. Bookings are now open for the Vat Masterclass 2015. To book your seat and save R1 000 on the Early Bird price, simply follow this link…

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Can you really trust SARS to dictate what input tax YOU can't claim?
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