Page 170 - Juta's Indirect Tax

s 222 TAX ADMINISTRATION ACT 28 OF 2011 s 226
(5) The tax rate applicable to the shortfall determined under subsections (3) and (4) is the maximum tax rate applicable to the taxpayer, ignoring an assessed loss or any other bene t brought forward from a preceding tax period to the tax period.
[Sub-s. (5) substituted by s. 75 (c) of Act 39 of 2013 – date of commencement deemed to have been 1 October 2012.]
223 Understatement penalty percentage table
(1) The understatement penalty percentage table is as follows:
224 Objection and appeal against imposition of understatement penalty
The imposition of an understatement penalty under section 222 or a decision by SARS not to remit an understatement penalty under section 223 (3), is subject to objection and appeal under Chapter 9.
[S. 224 substituted by s. 74 of Act 21 of 2012 – (date of
commencement deemed to have been 1 October 2012) and by s. 77 of Act 39 of 2013 – date of commencement deemed to have been 1 October 2012.]
Part B
Voluntary disclosure programme (ss. 225–233)
225 De nitions
In this Part, unless the context indicates otherwise, the following term, if in single quotation marks, has the following meaning:
‘default’ means the submission of inaccurate or incomplete information to SARS, or the failure to submit information or the adoption of a ‘tax position’, where such submission, non-submission, or adoption resulted in an understatement.
[De nition of ‘default’ substituted by s. 64 of Tax Administration Laws Amendment Act, 2015 – date of commencement: date of promulgation of Tax Administration Laws Amendment Act, 2015.]
1
2
3
4
5
6
Item
Behaviour
Standard case
If obstructive, or if it is
a ‘repeat case’
Voluntary disclosure after noti cation of audit or investigation
Voluntary disclosure before noti cation of audit or investigation
(i)
‘Substantial understatement’
10%
20%
5%
0%
(ii)
Reasonable care not taken in completing return
25%
50%
15%
0%
(iii)
No reasonable grounds for ‘tax position’ taken
50%
75%
25%
0%
(iv)
Gross negligence
100%
125%
50%
5%
(v)
Intentional tax evasion
150%
200%
75%
10%
Prelex
Wording of de nition of ‘default’ in force until promulgation of Tax Administration Laws Amendment Act, 2015
‘default’ means the submission of inaccurate or incomplete information to SARS, or the failure to submit information or the adoption of a ‘tax position’, where such submission, non-submission, or adoption resulted in—
(a) the taxpayer not being assessed for the correct amount of tax;
(b) the correct amount of tax not being paid by the taxpayer; or
(c) an incorrect refund being made by SARS.
[Sub-s. (1) substituted by s. 76 (1) (a) of Act 39 of 2013 – date of commencement: 16 January 2014.]
(2) An understatement penalty for which provision is made under this Chapter is also chargeable in cases where—
(a) an assessment based on an estimation under section
95 is made; or
(b) an assessment agreed upon with the taxpayer under
section 95 (3) is issued.
(3) SARS must remit a ‘penalty’ imposed for a
‘substantial understatement’ if SARS is satis ed that the taxpayer—
(a) made full disclosure of the arrangement, as de ned
in section 34, that gave rise to the prejudice to SARS or the scus by no later than the date that the relevant return was due; and
(b) was in possession of an opinion by an independent registered tax practitioner that—
[Words preceding sub-para. (i) substituted by s. 76 (1) (b) of Act 39 of 2013 – date of commencement: 16 January 2014.]
(i) was issued by no later than the date that the relevant return was due;
(ii) was based upon full disclosure of the speci c facts and circumstances of the arrangement and, in the case of any opinion regarding the applicability of the substance over form doctrine or the anti-avoidance provisions of a tax Act, this requirement cannot be met unless the taxpayer is able to demonstrate that all of the steps in or parts of the arrangement were fully disclosed to the tax practitioner, whether or not the taxpayer was a direct party to the steps or parts in question; and
(iii) con rmed that the taxpayer’s position is more likely than not to be upheld if the matter proceeds to court.
[Para. (b) substituted by s. 73 of Act 21 of 2012 – date of commencement deemed to have been 1 October 2012.]
226 Quali cation of person subject to audit or investigation for voluntary disclosure
[Heading substituted by s. 65 of Tax Administration Laws Amendment Act, 2015 – date of commencement: date of promulgation of Tax Administration Laws Amendment Act, 2015.]
(1) A person may apply, whether in a personal, representative, withholding or other capacity, for voluntary disclosure relief, unless that person is aware of—
(a) a pending audit or investigation into the affairs of the
person seeking relief, which is related to the ‘default’
the person seeks to disclose; or
(b) an audit or investigation that has commenced, but
has not yet been concluded, which is related to the
‘default’ the person seeks to disclose.
[Sub-s. (1) substituted by s. 65 of Tax Administration Laws Amendment Act, 2015 – date of commencement: date of promulgation of Tax Administration Laws Amendment Act, 2015.]
(2) A senior SARS of cial may direct that a person may apply for voluntary disclosure relief, despite the provisions of subsection (1), where the of cial is of the view, having regard to the circumstances and ambit of the audit or investigation, that—
(a)
the audit or investigation is related to the ‘default’ the person seeks to disclose;
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Juta’s IndIrect tax 2016