Updated: May 17
Did you know that the South African Revenue Service (SARS) must keep taxpayers informed during an audit process and provide an opportunity to respond to findings before assessments are raised? Section 40 of the Tax Administration Act, No. 28 of 2011 (“The TAA”) empowers SARS to select anyone for a Tax audit, inspection, or verification, whether it is on a random or risk assessment basis.
However, should SARS choose to engage a taxpayer for a formal audit, they must keep the taxpayer informed throughout the process before issuing results of the assessment.
The TAA protects the rights of the taxpayer by requiring SARS to do the following when conducting a Tax audit:
The person at SARS responsible for the audit and the process thereof must provide the taxpayer with a notice of commencement, and a status report at the various stages of the audit.
When the audit is complete, SARS has 21 business days to inform the taxpayer accordingly.
Upon completion of the audit, SARS must provide the taxpayer with a complete document containing the result of the audit, including the decision made by SARS and further instruction.
In conclusion, taxpayers have the right to know details of the audit, including the process and a conclusion, and further instructions.
After receiving the audit findings, the taxpayer has 21 business days to respond. The taxpayer has the responsibility to respond in writing based on the instructions given by SARS according to the audit findings.
SARS has come under fire in the past for conducting audits without prior knowledge of the taxpayer. In such a case the taxpayer has the right to dispute the audit assessment. The taxpayer is responsible for always checking whether they have received the notification via email, physical or postal address, or via their e-filing profile. Taxpayers are responsible for ensuring that the details are up to date and correct on their e-filing profile.
VAT IT SA can assist taxpayers to ensure all their details are up to date and assist with any dispute resolution regarding audit assessments.
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Article by: Ruan Jansen van Vuuren