Page 585 - Juta's Indirect Tax

IN 15 (4) TAX ADMINISTRATION ACT: INTERPRETATION NOTES IN 68 (2) Rule 10(1) – Appeal against assessment
(1) A taxpayer who wishes to appeal against the assessment to the tax board or tax court under section 107 of the Act must deliver a notice of appeal in the prescribed form and manner within—
(a) 30 days after delivery of the notice of disallowance of the objection under rule 9; or
(b) the extended period pursuant to an application under section 107(2).
DATE: ACT: SECTION: SUBJECT:
7 FEBRUARY 2013
INTERPRETATION NOTE 68 (ISSUE 2)
TAX ADMINISTRATION ACT 28 OF 2011 (THE ACT)
CHAPTER 12 AND SCHEDULE 1
PROVISIONS OF THE TAX ADMINISTRATION ACT THAT DID NOT COMMENCE ON 1 OCTOBER 2012 UNDER PROCLAMATION 51 IN GOVERNMENT GAZETTE 35687
Preamble
In this Note unless the context indicates otherwise—
• ‘section’ means a section of the Act;
• ‘the Proclamation’ means Proclamation 51 of 14 September 2012 published in Government Gazette 35687; and
• any word or expression bears the meaning ascribed to it in the Act.
1. Purpose
On 1 October 2012 the Act came into operation except for certain provisions relating to interest. This Note provides guidance on the identi cation of those interest provisions which have not come into operation.
Issue 1 of this Note omitted to include sections 64B(9) and 64K(6) of the Income Tax Act 58 of 1962 in Annexure B. This oversight has been corrected in this issue.
2. Background
Under section 272 the President must by proclamation in the Gazette determine the date on which the Act comes into operation and may determine different effective dates for different provisions.
The proclamation (Annexure A) was published on 14 September 2012 and provides that the Act shall come into operation on 1 October 2012 except for—
• sections 187(2), (3)(a) to (e) and (4), 188(2) and (3) and 189(2) and (5); and
• a provision of Schedule 1 to the Act that amends or repeals a provision of a tax Act relating to interest under that tax Act, to the extent of that amendment or repeal.
The Act introduces a new regime for purposes of the accrual of interest on tax debts or refunds owed by SARS. Most of the interest provisions are contained in Chapter 12 which comprises—
• section 187—General interest rules;
• section 188—Period over which interest accrues; and
• section 189—Rate at which interest is charged.
Schedule 1 of the Act sets out the provisions of various Acts administered by SARS that have been or will be amended by the Act. The Acts affected and the paragraphs of Schedule 1 that apply include the Transfer Duty Act, 1949 (paragraphs 1 to 11), Estate Duty Act, 1955 (paragraphs 12 to 22), Income Tax Act, 1962 (paragraphs 23 to 107), Value-Added Tax Act, 1991 (paragraphs 108 to 146), South African Revenue Service Act, 1997 (paragraph 147), Skills Development Levies Act, 1999 (paragraphs 148 to 156), Unemployment Insurance Contributions Act, 2002 (paragraphs 157 to 166), Diamond Export Levy (Administration) Act, 2007 (paragraphs 167 to 171), Securities Transfer Tax Administration Act, 2007 (paragraphs 172 to 179), Mineral and Petroleum Resources Royalty (Administration) Act, 2008 (paragraphs 183 to 192) and a number of amending Acts.
The new interest regime necessitated substantial changes to SARS’s existing systems which were not nalised by 1 October 2012. As a result, most of the provisions of Chapter 12 of the Act that relate to the accrual of interest on tax debts or refunds, did not commence on that date. Consequently, until the commencement of the provisions contained in Chapter 12, the provisions of Schedule 1 to the Act that repeal, delete or amend the interest provisions of the other tax Acts regulating the accrual and calculation of interest, will not commence and these provisions of the other tax Acts remain in force.
3. The law
The provisions of the Act that relate to the accrual of interest on tax debts or refunds that did not commence are contained in Chapter 12 and Schedule 1 to the Act. The table in Annexure B sets out a description of the provisions of Schedule 1 to the Act that have not commenced or have commenced except to the extent that they relate to interest.
4. Application of the law
4.1 Provisions of the Act relating to the accrual of interest that commenced on 1 October 2012
The new interest regime under the Act commenced in respect of—
• interest on an understatement penalty imposed under Chapter 16 and not paid by the effective date of the tax that is
understated; and
• interest on a tax debt resulting from a jeopardy assessment issued under section 94 and not paid by the date for
payment speci ed in the jeopardy assessment.
The interest provisions of the Act relating to understatement penalties and jeopardy assessments commenced on 1 October 2012 because they are not regulated under any of the other tax Acts. For purposes of the accrual and calculation
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