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Three guidelines if you can't pay SARS your VAT liabilities on time

by , 16 May 2016
Your business now finds itself in an unavoidable position where it can't pay SARS its VAT liabilities on time.

This is a big deal because you're still liable! And you'll be facing serious penalties along with interest.

So instead of just leaving it, follow these three guidelines if ever you can't pay your VAT liabilities on time...


 Has SARS taken ages to respond to your objection?
Did you know SARS must respond to your objection in 60 days?
And if it doesn't, the Tax Administration Act gives you a powerful weapon you can legally use to win your case.
Here's everything you need to know about objecting and appealing a SARS assessment


Three guidelines for if ever you can't pay your VAT liabilities on time…

GUIDELINE#1: SARS will usually remit the penalties

If your late payment wasn't intentional, SARS will usually remit the penalty.

So pay all outstanding VAT, penalties and interest so that SARS can remit all the penalties, but not the interest. 

But remember that this will be the case only if your late payment wasn't intentional.

Examples of unintentional late payments include:

·         If there was a strike;
·         A big debtor suddenly let you down; or
·         Your accountant was ill; etc.

NOTE: You'll be required to prove the above-mentioned points.

GUIDELINE#2: What to do if SARS doesn't remit the penalties

SARS must remit the penalty if you paid late because the government, province, municipality or any other state institution caused the late payment.

You must hand in a request at a SARS branch for a penalty remission and attach a copy of the bank statement or other supporting documents.

If SARS doesn't remit your penalty, then you should ask them for a reason in writing. And if you're not happy with this reason, then lodge an objection. If SARS rejects your objection, submit an appeal.

GUIDELINE#3: Ask SARS to allocate the remission

If SARS remits the penalty, it usually won't refund it. Instead, SARS will show it as 'unallocated payments' on the account statement for the tax year.

You must write to SARS' 'Accounts Maintenance' at your local office and ask them to allocate the amount to a future tax period, and then reduce the amount for that particular tax period.

*To see other guidelines and tips, page over to Chapter O 04: Overdue VAT account payments…, in your Practical VAT loose Leaf Service handbook.

If you don't already have a copy, simply click here.

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