The TAA is serious about tax debts. I If you're considered a 'responsible third party' you're in trouble.
Here are the third parties the TAA extends personal liability to
#1: A third party holding or owing money and appointed to satisfy tax debts: This refers to a person who holds or owes or will hold or owe any money for or to a taxpayer and who's required by SARS to pay the money, but fails to do so.
This person is also known as an agent appointment.
#2: A third party involved in financial management: The Practical Vat Loose Leaf Service says this is a person who controls or is regularly involved in the management of the financial affairs of a taxpayer.
This could be a Financial Manager who was negligent or fraudulent in the payment of the tax debts of the taxpayer.
#3: Shareholders acquiring assets of a wound-up company: A shareholder who acquired assets within one year prior to the winding-up of a company without having satisfied its tax debts.
This generally happens in a scenario known as asset stripping or dividend stripping of a company by shareholders;
#4: A transferee receiving assets below market value: This refers to any person who's a connected person in relation to a taxpayer and received assets from that taxpayer without consideration or for consideration below fair market value; and
#5: A third party who assists with obstruction of tax collection: A person, who knowingly assists a taxpayer in order to obstruct the collection of tax debts, is jointly and severally liable with the taxpayer.
If SARS holds you personally liable as a third party follow these four steps.
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