Page 165 - Juta's Indirect Tax

s 196 TAX ADMINISTRATION ACT 28 OF 2011 s 202
(2) In determining whether the cost of recovery is likely to exceed the anticipated amount to be recovered as referred to in subsection (1), a senior SARS of cial must have regard to—
(a) the amount of the tax debt;
(b) the length of time that the tax debt has been
outstanding;
(c) the steps taken to date to recover the tax debt and the
costs involved in those steps, including steps taken to
locate or trace the ‘debtor’;
(d) the likely costs of continuing action to recover the
tax debt and the anticipated return from that action, including the likely recovery of costs that may be awarded to SARS;
(e) the nancial position of the ‘debtor’, including that ‘debtor’s’ assets and liabilities, cash ow, and possible future income streams; and
(f) any other information available with regard to the recoverability of the tax debt.
Part C
Permanent write off of tax debt (ss. 197–199)
197 Permanent write off of tax debt
(1) A senior SARS of cial may authorise the permanent ‘write off’ of an amount of tax debt—
(a) to the extent satis ed that the tax debt is irrecoverable
at law as referred to in section 198; or
(b) if the debt is ‘compromised’ in terms of Part D.
(2) SARS must notify the ‘debtor’ in writing of the amount of tax debt ‘written off’.
198 Tax debt irrecoverable at law
(1) A tax debt is irrecoverable at law if—
(a) it cannot be recovered by action and judgment of a
court; or
(b) it is owed by a ‘debtor’ that is in liquidation or
sequestration and it represents the balance outstanding after notice is given by the liquidator or trustee that no further dividend is to be paid or a nal dividend has been paid to the creditors of the estate; or
(c) it is owed by a ‘debtor’ that is subject to a business rescue plan referred to in Part D of Chapter 6 of the ‘Companies Act’, to the extent that it is not enforceable in terms of section 154 of that Act.
(2) A tax debt is not irrecoverable at law if SARS has not rst explored action against or recovery from the assets of the persons who may be liable for the debt under Part D of Chapter 11.
199 Procedure for writing off tax debt
(1) Before deciding to ‘write off’ a tax debt, a senior SARS of cial must—
(a) determine whether there are any other tax debts
owing to SARS by the ‘debtor’;
(b) reconcile amounts owed by and to the ‘debtor’,
including penalties, interest and costs;
(c) obtain a breakdown of the tax debt and the periods to
which the outstanding amounts relate; and
(d) document the history of the recovery process and the
reasons for deciding to ‘write off’ the tax debt.
(2) In deciding whether to support a business rescue plan referred to in Part D of Chapter 6 of the ‘Companies Act’ or ‘compromise’ made to creditors under section 155 of the ‘Companies Act’ a senior SARS of cial must, in addition to considering the information as referred to in section 150 or 155 of that Act, take into account the information and aspects covered in the provisions of
Juta’s IndIrect tax 2016
sections 200, 201 (1), 202 and 203 with the necessary changes.
Part D
Compromise of tax debt (ss. 200–205)
200 Compromise of tax debt
A senior SARS of cial may authorise the ‘compromise’ of a portion of a tax debt upon request by a ‘debtor’, which complies with the requirements of section 201, if—
(a) the purpose of the ‘compromise’ is to secure the
highest net return from the recovery of the tax debt;
and
(b) the ‘compromise’ is consistent with considerations
of good management of the tax system and administrative ef ciency.
201 Request by debtor for compromise of tax debt
(1) A request by a ‘debtor’ for a tax debt to be ‘compromised’ must be signed by the ‘debtor’ and be supported by a detailed statement setting out—
(a) the assets and liabilities of the ‘debtor’ re ecting their
current fair market value;
(b) the amounts received by or accrued to, and
expenditure incurred by, the ‘debtor’ during the 12
months immediately preceding the request;
(c) the assets which have been disposed of in the preceding three years, or such longer period as a senior SARS of cial deems appropriate, together with their value, the consideration received or accrued, the identity of the person who acquired the assets and the relationship between the ‘debtor’ and the person who
acquired the assets, if any;
(d) the ‘debtor’s’ future interests in any assets, whether
certain or contingent or subject to the exercise of a
discretionary power by another person;
(e) the assets over which the ‘debtor’, either alone or with other persons, has a direct or indirect power of appointment or disposal, whether as trustee or
otherwise;
(f) details of any connected person in relation to that
‘debtor’;
(g) the ‘debtor’s’ present sources and level of income
and the anticipated sources and level of income for the next three years, with an outline of the ‘debtor’s’ nancial plans for the future; and
(h) the ‘debtor’s’ reasons for seeking a ‘compromise’.
(2) The request must be accompanied by the evidence supporting the ‘debtor’s’ claims for not being able to make
payment of the full amount of the tax debt.
(3) The ‘debtor’ must warrant that the information
provided in the application is accurate and complete.
(4) A senior SARS of cial may require that the application be supplemented by such further information
as may be required.
202 Consideration of request to compromise tax debt
(1) In considering a request for a ‘compromise’, a senior SARS of cial must have regard to the extent that the ‘compromise’ may result in—
(a) savings in the costs of collection;
(b) collection at an earlier date than would otherwise be the case without the ‘compromise’;
(c) collection of a greater amount than would otherwise have been recovered; or
(d) the abandonment by the ‘debtor’ of some claim or right, which has a monetary value, arising under a tax
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TAX ADMINISTRATION ACT