Receiving a tax assessment from the South African Revenue Service (SARS) that you believe to be incorrect can undoubtedly be a stressful and overwhelming experience. However, it is important to know that every taxpayer in South Africa has the right to dispute an assessment they deem inaccurate or unjust.
SARS has established a clear and structured appeal process designed specifically to address these disagreements, ensuring that your concerns are heard and resolved in a fair and transparent manner. By understanding your rights and the steps involved, you can approach the process with confidence and clarity.
Understanding Your Right to Object and Appeal
The first step after receiving a disputed SARS tax assessment is to lodge a formal objection. This involves submitting the necessary documentation and clearly outlining the reasons why you believe the assessment is incorrect. If SARS disallows the objection or only partially allows it, you are not at the end of the road.
You have the right to take the matter further by lodging an appeal. An appeal is a formal process that enables you to have the objection outcome reviewed by either the tax board or the tax court, depending on the nature and complexity of the case. This ensures that there is an additional layer of scrutiny and fairness in resolving tax disputes.
Critical Deadlines You Cannot Miss
Objection Deadline
It is crucial to note that an objection must be lodged within 80 business days from the date of the assessment. This time frame is non-negotiable and serves as the first critical step in addressing any disputes with SARS. Acting promptly is essential to ensure your rights are preserved, as late objections are generally not entertained without valid and compelling reasons.
Appeal Deadline
Should your objection be disallowed or only partially allowed, you must take further action by filing an appeal within 30 business days of receiving the objection outcome. This allows you to escalate the matter for further review. Delaying this step could jeopardise your ability to pursue a resolution, underscoring the importance of adhering strictly to the deadline.
Extensions and Acting Promptly
While it is possible to request an extension to these deadlines if reasonable grounds exist, such requests require strong justifications and are considered on a case-by-case basis. Even with this option, it is vital to act swiftly and proactively to avoid unnecessary complications or delays in resolving your case. Timeliness is key to maintaining control of the process and protecting your interests.
How to Lodge an Appeal with SARS
eFiling Objections & Appeals
For the majority of tax types, including Corporate Income Tax (CIT), Personal Income Tax (PIT), and Value-Added Tax (VAT), the primary method for lodging objections and appeals is through the SARS eFiling portal. This guided platform simplifies the process, offering a structured approach that reduces the likelihood of invalid submissions. By following the step-by-step guidance provided, taxpayers can ensure that all required fields are completed and necessary documents are submitted, streamlining the resolution of disputes and saving valuable time.
Manual Submissions
There are specific exceptions where the online eFiling process may not be applicable. For these cases, a manual process must be followed using the ADR2 form. This form, which facilitates Alternative Dispute Resolution, should be completed accurately and submitted either at a SARS branch or via the designated SARS email address. It is important to confirm whether your specific case qualifies as an exception where manual submission is required.
Gathering Your Documents
To build a compelling appeal or objection, it is critical to gather and organise all substantiating documents relevant to your case. These may include contracts, receipts, bank statements, or any other supporting evidence that aligns with your grounds for appeal.
Providing comprehensive and clear documentation strengthens your position and aids SARS in assessing your case fairly and efficiently. Before submission, ensure that all your documents are complete, properly formatted, and aligned with the specific requirements of SARS to avoid unnecessary delays.
Understanding the “Pay Now, Argue Later” Rule
Under the “Pay Now, Argue Later” principle, SARS generally requires the disputed tax amount to be paid, even while the appeal process is ongoing. This rule is rooted in ensuring the uninterrupted flow of revenue to the South African government while disputes are resolved. However, this can place significant financial pressure on taxpayers who are challenging an assessment they believe to be incorrect.
To address this, taxpayers have the option to submit a “Request for Suspension of Payment”. This is a critical step that temporarily halts SARS’s collection proceedings while the dispute remains unresolved. It is important to note that a suspension is not granted automatically; taxpayers must formally apply and provide strong reasons for why the payment of the disputed amount should be suspended.
SARS will assess factors such as the strength of the disputed case, potential hardship caused by immediate payment, and the risk of non-payment should the taxpayer ultimately lose the appeal. Taking this step promptly can help safeguard your financial stability while providing the necessary time to resolve your case fairly.
Alternative Dispute Resolution (ADR)
Alternative Dispute Resolution (ADR) offers taxpayers a less formal and more cost-effective avenue for resolving disputes with SARS through mutual agreement. This process is designed to encourage open communication and achieve a resolution that satisfies both parties without the need for lengthy litigation.
Taxpayers who wish to pursue ADR can indicate their willingness to do so when submitting their appeal. By choosing ADR, taxpayers may benefit from a more collaborative approach to resolving their case, potentially saving both time and resources while working towards a fair and mutually acceptable outcome.
Taking Control of Your Tax Dispute
Disputing a SARS tax assessment is every taxpayer’s right, but it is essential to be well-informed about the correct procedures and adhere strictly to the deadlines involved. The process begins with lodging an objection to the assessment, followed by an appeal if the objection is unsuccessful.
Taxpayers should also consider applying for a suspension of payment while their dispute is under review and make full use of the SARS eFiling system to manage submissions efficiently. Navigating this process can be complex, but with professional tax assistance, you can approach your dispute with confidence, ensuring the best possible outcome while safeguarding your financial interests.