Page 40 - SAIT Compendium 2016 Volume2

Write-off INCOME TAX ACT: REGULATIONS ANd NOTICES Write-off
(ii) to save a business from failure or closure, regardless of whether or not a large number of people depend on the business for employment or the activities of the business serve a national interest;
(iii) to alleviate harsh or unfair operation of a tax law in particular circumstances; or
(v)[sic] to further a charitable objective or to create a benevolent public image for the Commissioner;
(g) there will be no bene t for the Commissioner in the compromise other than collecting an amount equal to the return that would ow from the sequestration or liquidation of the debtor;
(h) it may adversely affect broader taxpayer compliance;
(i) the debtor within the period of ve years immediately before the request for the compromise was—
(i) a party to an earlier agreement with the Commissioner to compromise an amount of tax debt; (ii) sequestrated or liquidated; or
(iii) a party to a compromise or arrangement with the debtor’s creditors, as contemplated in section 311 of the Companies Act, which was sanctioned by the Court;
(j) the debtor is a company or a trust and any director, trustee or person acting in the management of the debtor— (i) has been involved in fraud or tax evasion; or
(ii) has a past history of being involved in failed companies or trusts;
and the Commissioner has not rst explored action against or recovery from the personal assets of those directors, trustees or persons.
13 Procedure for compromise of tax debt
(1) If the Commissioner compromises a tax debt, the Commissioner and debtor must sign an agreement setting out—
(a) the amount payable by the debtor in full satisfaction of the debt;
(b) the undertaking by the Commissioner not to pursue recovery of the balance of the tax debt; and
(c) all other conditions subject to which the tax debt is compromised by the Commissioner, which may include a
requirement that the debtor must comply with subsequent obligations imposed in terms of any Act administered by the Commissioner.
14 Commissioner not bound by compromise
The Commissioner will not be bound by the compromise if—
(a) the debtor failed to make full disclosure of all material facts to which the compromise relates;
(b) the debtor supplied any materially incorrect information to which the compromise relates;
(c) the debtor fails to comply with any provision or condition contained in the agreement contemplated in paragraph
13; or
(d) the debtor is liquidated or his or her estate is sequestrated before that debtor has fully complied with all conditions
contained in the agreement as contemplated in paragraph 13.
PART 6 Records and reporting
15 Records of tax debts written off or compromised
(1) The Commissioner must maintain a register of all tax debts written off or compromised in terms of these Regulations.
(2) The register contemplated in subparagraph (1) must contain—
(a) the details of the debtor, including name, address and tax reference numbers;
(b) the amount of the tax debt written off or compromised and the periods to which the tax debts relate; and (c) the reason for writing off or compromising the tax debt.
16 Reporting by Commissioner of tax debts written-off or compromised
(1) The amount of tax debts written off or compromised during any nancial year must be disclosed in the annual nancial statements of the South African Revenue Service relating to administered revenue for that year.
(2) The Commissioner must on an annual basis provide to the Auditor-General and to the Minister of Finance a summary of all tax debts which were written off or compromised in whole or in part during the period covered by that summary, which must—
(a) be in such format which, subject to section 4 (1) (b) of the Income Tax Act, 1962, does not disclose the identity of
the debtor concerned;
(b) be submitted at such time as may be agreed between the Commissioner and the Auditor-General or Minister of
Finance, as the case may be; and
(c) contain details of the number of tax debts written off or compromised, the amount of revenue forgone and the
estimated amount of savings in costs of recovery, which must be re ected in respect of main classes of taxpayers or
sections of the public.
Exercise of power to write off or compromise
17 Exercise of power to write off or compromise tax debt
The power to write off or compromise any amount of tax debt in terms of these Regulations may be exercised by the Commissioner personally or by any of cial delegated by the Commissioner for that purpose.
18 No relationship between debtor and Commissioner or delegated of cial
The Commissioner or relevant delegated of cial may not exercise any power to write off or compromise any tax debt, if he or she has, or at any stage had a personal, family, social, business, professional, employment or nancial relationship with the debtor concerned.
32 SAIT CompendIum oF TAx LegISLATIon VoLume 2