The South African Institute of Chartered Accountants (SAICA) advises taxpayers to be aware of the new tax dispute resolution rules issued by SARS recently.

The new rules were published and became effective on 11 July 2014, and suggest the procedures to be followed in lodging an objection and appeal against an assessment or a decision subject to objection and appeal, as well as procedures for alternative dispute resolution, the conduct and hearing of appeals, and application on notice before a Tax Court.   

The new tax dispute resolution rules are relevant when a person is in disagreement with an assessment or decision by SARS. This assumes that the disagreement is not due to an undisputed error on a tax return, as the request correction facility on electronic filing (e-filing) may be used to correct the error. The Tax Administration Act requires that persons entitled to object to an assessment or decision, must lodge their objection within the period prescribed in the rules, according to the prescribed manner and terms.

The rules provide that persons can elect to have their disputes resolved  according to the alternative dispute resolution proceeding.  If not, certain appeals could be dealt with by the Tax Board.  “One can also take the matter to the Tax Court, High Court, and Supreme Court of Appeal,” says Piet Nel, project director of Tax at SAICA.

The new changes affect the rules for the delivery of objections, time periods and certain transitional matters. Taxpayers already had to submit objections electronically. The new rules now allow for a document, notice or request to be delivered to SARS, the clerk or the registrar by electronic means to an e-mail address or fax number. If the taxpayer or appellant uses a SARS e-filing service, the dispute of an assessment or objection could also be submitted through that service (the NOO1).

In terms of the time period, Nel says: “The basic rule is still that an objection must be delivered within 30 days from the date of assessment.  It is advisable that a taxpayer request reasons for the assessment.  SARS must now respond to a request for reasons within 30 to 45 days.  The taxpayer must deliver a notice of objection within 30 days after delivery of the reasons. SARS must notify the taxpayer of the allowance or disallowance of the objection and the basis thereof within 60 days after delivery of the taxpayer's objection.  A taxpayer who wishes to appeal against the assessment to the Tax Board or Tax Court must deliver a notice of appeal in the prescribed form and manner within 30 days after delivery of the notice of disallowance of the objection.”

When it comes to transitional arrangements, he explains that “a document delivered by the taxpayer, complainant, SARS, clerk or registrar under the previous rules, must be regarded as delivered in terms of the comparable provision of these rules, as from the date that the document was issued or delivered under the previous rules.  A request for reasons, objection, appeal to the Tax Board or Tax Court, alternative dispute resolution, settlement discussions, or applications related a procedural matter taken or instituted under the previous rules, but not completed by the 11 July 2014, have to be continued and concluded under these rules as if taken or instituted under these new rules.”

Nel reminds tax payers that this is a formal process, and if the prescribed process is not followed, the dispute may not be resolved.  In complex matters it is advisable to obtain professional assistance.  SAICA’s Tax Directorate is available to help with enquiries or assist people to find suitable professional advice.