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Did you know you can charge SARS 15.5% interest if they pay your VAT refund, or any other refund, late?

by , 07 September 2016
Did you know you can charge SARS 15.5% interest if they pay your VAT refund, or any other refund, late?I'm sure you've had to wait at least once for a refund from SARS. You've phoned the call centre, sent letters and they keep telling you it's still being 'processed'.

If SARS has agreed to pay you a refund, and the money's not in your account. Charge them interest!

If you're due a VAT refund, SARS must refund you within 21 days of submitting your VAT return.

But for all other taxes, the refund time depends on how quickly SARS can verify all the details of the case. IF SARS has your correct banking details, etc.

Regardless, always ask SARS for an indication of how long they will take to pay you. Get it in writing!

Here's how to make SARS pay your interest…

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How to get your VAT refund from SARS within 21 days every time!

Picture this: It's been three months since you submitted your monthly VAT refund and you still haven't received anything from SARS!

You've spent hours on the phone with them... And you've sent them countless documents.

Now you're worried you're not going to get your VAT refund at all.

If it was SARS waiting for money, it would've forced you to pay up already.

And here's the thing, you're just as entitled to demand your money from SARS... AND YOU CAN!

But first, you need to follow the right procedure when you submit your VAT refund. If you don't, you may never see your money again.

Luckily for you, we've put together a ten-step action plan to help get your refund when it's due... And I want you to have it!  

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How to make SARS pay your interest

At the first sign of delay, charge SARS interest.

If SARS doesn't pay you by the date they gave you, and they can't give you any good reasons for the delay, charge them interest!

Hand deliver, or send a registered letter to your SARS branch to demand Mora interest from them on the late refund.
The Mora interest rate is laid down by the Government. It's 15.5% per annum.

To understand how it works for tax refunds, let's look at a common business scenario below.

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Let's take a look at a common business scenario…

Let's say a client must pay you money on a certain date (e.g. 30 days from invoice). They don't have to pay you interest, even if they pay late, unless you've both signed an agreement that interest will become payable from a specific date.

Since most businesses don't put this sort of agreement in place from the start, they can use the Mora interest principle. If the client hasn't paid you by the due date as indicated on the invoice, you can give him a written notice that states that as from a reasonable date in the future (say, 14 days), Mora interest will be payable until he has repaid the debt.

You can do the same with SARS, even though they're not a client or supplier.

Few people know about this, but it's very effective! Any taxpayer, provisional or otherwise, can use the Mora interest principle to get the interest due to you when SARS has failed to pay you a refund.

Why is SARS so quiet about this?

Because any SARS employee who gets a Mora interest letter will be in BIG trouble! You see, this interest comes out of SARS' expenditure budget and not the State budget…

You can get a copy of the letter you can use when you sign up to the Tax Watch Newsletter.

P.S. Putting a zero in the wrong place on the new VAT Return could trigger your next SARS audit! Find out how to make sure this never happens to you by getting your VAT Return right every single time.


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