What happens with outstanding payments on your assessed taxes?
Have you ever been in this situation? You submit your Vat return, and a few months later SARS assesses you. It says you claimed deductions you weren't entitled to! So because SARS says you now owe it money, you object to the assessment.
While the tax dispute is still under way, a SARS call centre agent calls you asking for the payment on the assessed taxes.
What do you do? Do you pay it now and argue later but risk straining your cash flow? Or, do you tell SARS it needs to wait, but risk late payment fines and penalties?
Which option is correct? Read on as I let you in on what you can legally do about outstanding payments on your assessed taxes...
Have you received a nasty assessment from SARS?
Don't just sit back and let SARS have its way.
You have a lifeline.
Here are four steps you can use to lodge your objection
Unfortunately, you have to pay now and argue later!
One of the most common terms, when it comes to owing SARS money because of an assessment, is the pay-now, argue-later rule.
It means you have to pay a tax debt before your tax dispute is finalised or resolved. So, your obligation to pay tax, which arises on an assessment, isn't ''automatically'' suspended simply because you lodged an objection or appeal.
And it's in the law. The case of Metcash Trading Ltd v Commissioner of the South African Revenue Service and Another 2001 (1) SA1109 (CC)
showed the Constitutional Court being in favour of the pay-now, argue-later
principle for several reasons.
So, you have to pay now and argue later. Unless you apply for a postponement. Here's how…
Filling in the wrong block on your Vat return, will trigger the 'Dear Vendor' letter
SARS tell you your VAT201 declaration has been identified for verification. It wants you to review your VAT201 and submit corrections.
DON'T just upload all your documents!
Or you'll give SARS permission to grab money from your business bank account!
Here's what you should do…
Request for a payment suspension
You can ask SARS to suspend your obligation to pay any assessed taxes, if you plan to object or appeal against an assessment. The Tax Administration Act lets you to apply to SARS in writing for this.
But you must make sure your application reaches SARS within the 30 day period you have to object to the assessment. Or else SARS will start collection proceedings.
For sample points of important claims you should include in your application, click here.
We discuss the triggers for SARS assessments in detail at this year's Vat Masterclass. Book your seat here
and save R1 000 if you book and pay today.
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