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Tax Administration Act 2011

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[Last checked: 10 September 2024.*]

*The last time this Act was reviewed for updates.

TAX ADMINISTRATION ACT 28 of 2011

[Updated to 8 August 2024**]

**Date of last changes incorporated in this Act.

__________________

(English text signed by the President)

(Assented to 2 July 2012)

___________________

Published: G. 35491 of 4 July 2012

Commencement: 1 October 2012,

except for ss 187(2), (3)(a) to (e) and (4), 188(2) and (3) and 189(2) and (5) of the Act; and any 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: To be proclaimed

Amended by

Tax Administration Laws Amendment Act 21 of 2012 (G. 36036, with effect from 20 December 2012),

Employment Tax Incentive Act 26 of 2013 (G. 37185, with effect from 1 January 2014),

Tax Administration Laws Amendment Act 39 of 2013 (G. 37236, with effect from 16 January 2014),

Tax Administration Laws Amendment Act 44 of 2014 (G. 38406, with effect from 20 January 2015),

Tax Administration Laws Amendment Act 23 of 2015 (G. 39586 with effect from 8 January 2016),

Tax Administration Laws Amendment Act 16 of 2016 (G. 40563, with effect from 19 January 2017),

Tax Administration Laws Amendment Act 13 of 2017 (G. 41341, with effect from 18 December 2017),

Tax Administration Laws Amendment Act 22 of 2018 (G. 42169, with effect from 17 January),

Tax Administration Laws Amendment Act 33 of 2019 (G. 42952, with effect from 15 January 2020),

Tax Administration Laws Amendment Act 24 of 2020 (G. 44080, with effect from 20 January 2021),

Tax Administration Laws Amendment Act 21 of 2021 (G. 45788, with effect from 19 January 2022),

Tax Administration Laws Amendment Act 16 of 2022 (G. 47872, with effect from 5 January 2023),

Tax Administration Laws Amendment Act 18 of 2023 (G. 49947, with effect from 22 December 2023).

Uncommenced Amendments

Tax Administration Laws Amendment Act 44 of 2014

Tax Administration Laws Amendment Act 23 of 2015

ACT

To provide for the effective and efficient collection of tax; to provide for the alignment of the administration provisions of tax Acts and the consolidation of the provisions into one piece of legislation to the extent practically possible; to determine the powers and duties of the South African Revenue Service and officials; to provide for the delegation of powers by the Commissioner; to provide for the authority to act in legal proceedings; to determine the powers and duties of the Minister of Finance; to provide for the establishment of the office of the Tax Ombud; to determine the powers and duties of the Tax Ombud; to provide for registration requirements; to provide for the submission of returns and the duty to keep records; to provide for reportable arrangements; to provide for the request for information; to provide for the carrying out of an audit or investigation by the South African Revenue Service; to provide for inquiries; to provide for powers of the South African Revenue Service to carry out searches and seizures; to provide for the confidentiality of information; to provide for the South African Revenue Service to issue advance rulings; to make provision in respect of tax assessments; to provide for dispute resolution; to make provision for the payment of tax; to provide for the recovery of tax; to provide for the South African Revenue Service to recover interest on outstanding tax debts; to provide for the refund of excess payments; to provide for the write-off and compromise of tax debts; to provide for the imposition and remittance of administrative non-compliance penalties; to provide for the imposition of understatement penalties; to provide for a voluntary disclosure programme; to provide for criminal offences and sanctions; to provide for the reporting of unprofessional conduct by tax practitioners; and to provide for matters connected therewith.

BE IT ENACTED by the Parliament of the Republic of South Africa, as follows:—

ARRANGEMENT OF SECTIONS

[Arrangement of Sections amended by s 87 of Act 39 of 2013 with effect from 1 October 2012, s 26 of Act 33 of 2019 with effect from 15 January 2020.]

CHAPTER 1

DEFINITIONS

1. Definitions

CHAPTER 2

GENERAL ADMINISTRATION PROVISIONS

Part A

In general

2. Purpose of Act

3. Administration of tax Acts

4. Application of Act

5. Practice generally prevailing

Part B

Powers and duties of SARS and SARS officials

6. Powers and duties

7. Conflict of interest

8. Identity cards

9. Decision or notice by SARS

Part C

Delegations

10. Delegations by the Commissioner

Part D

Authority to act in legal proceedings

11. Legal proceedings involving Commissioner

12. Right of appearance in proceedings

Part E

Powers and duties of Minister

13. Powers and duties of Minister

14. Power of Minister to appoint Tax Ombud

Part F

Powers and duties of Tax Ombud

15. Office of Tax Ombud

16. Mandate of Tax Ombud

17. Limitations on authority

18. Review of complaint

19. Reports by Tax Ombud

20. Resolution and recommendations

21. Confidentiality

CHAPTER 3

REGISTRATION

22. Registration requirements

23. Communication of changes in particulars

24. Taxpayer reference number

CHAPTER 4

RETURNS AND RECORDS

Part A

General

25. Submission of return

26. Third party returns

27. Other returns required

28. Statement concerning accounts

29. Duty to keep records

30. Form of records kept or retained

31. Inspection of records

32. Retention period in case of audit, objection or appeal

33. Translation

Part B

Reportable arrangements

34. Definitions

35. Reportable arrangements

36. Excluded arrangements

37. Disclosure obligation

38. Information to be submitted

39. Reportable arrangement reference number

CHAPTER 5

INFORMATION GATHERING

Part A

General rules for inspection, verification, audit and criminal investigation

40. Selection for inspection, verification or audit

41. Authorisation for SARS official to conduct audit or criminal investigation

42. Keeping taxpayer informed

42A. Procedure where legal professional privilege is asserted

43. Referral for criminal investigation

44. Conduct of criminal investigation

Part B

Inspection, request for relevant material, audit and criminal investigation

45. Inspection

46. Request for relevant material

47. Production of relevant material in person

48. Field audit or criminal investigation

49. Assistance during field audit or criminal investigation

Part C

Inquiries

50. Authorisation for inquiry

51. Inquiry order

52. Inquiry proceedings

53. Notice to appear

54. Powers of presiding officer

55. Witness fees

56. Confidentiality of proceedings

57. Incriminating evidence

58. Inquiry not suspended by civil or criminal proceedings

Part D

Search and seizure

59. Application for warrant

60. Issuance of warrant

61. Carrying out search

62. Search of premises not identified in warrant

63. Search without warrant

64. Legal professional privilege

65. Person’s right to examine and make copies

66. Application for return of seized relevant material or costs of damages

CHAPTER 6

CONFIDENTIALITY OF INFORMATION

67. General prohibition of disclosure

68. SARS confidential information and disclosure

69. Secrecy of taxpayer information and general disclosure

70. Disclosure to other entities

71. Disclosure in criminal, public safety or environmental matters

72. Self-incrimination

73. Disclosure to taxpayer of own record

74. Publication of names of offenders

CHAPTER 7

ADVANCE RULINGS

75. Definitions

76. Purpose of advance rulings

77. Scope of advance rulings

78. Private rulings and class rulings

79. Applications for advance rulings

80. Rejection of application for advance ruling

81. Fees for advance rulings

82. Binding effect of advance rulings

83. Applicability of advance rulings

84. Rulings rendered void

85. Subsequent changes in tax law

86. Withdrawal or modification of advance rulings

87. Publication of advance rulings

88. Non-binding private opinions

89. Binding general rulings

90. Procedures and guidelines for advance rulings

CHAPTER 8

ASSESSMENTS

91. Original assessments

92. Additional assessments

93. Reduced assessments

94. Jeopardy assessments

95. Estimation of assessments

96. Notice of assessment

97. Recording of assessments

98. Withdrawal of assessments

99. Period of limitations for issuance of assessments

100. Finality of assessment or decision

CHAPTER 9

DISPUTE RESOLUTION

Part A

General

101. Definitions

102. Burden of proof

103. Rules for dispute resolution

Part B

Objection and appeal

104. Objection against assessment or decision

105. Forum for dispute of assessment or decision

106. Decision on objection

107. Appeal against assessment or decision

Part C

Tax board

108. Establishment of tax board

109. Jurisdiction of tax board

110. Constitution of tax board

111. Appointment of chairpersons

112. Clerk of tax board

113. Tax board procedure

114. Decision of tax board

115. Referral of appeal to tax court

Part D

Tax court

116. Establishment of tax court

117. Jurisdiction of tax court

118. Constitution of tax court

119. Nomination of president of tax court

120. Appointment of panel of tax court members

121. Appointment of registrar of tax court

122. Conflict of interest of tax court members

123. Death, retirement or incapability of judge or member

124. Sitting of tax court not public

125. Appearance at hearing of tax court

126. Subpoena of witness to tax court

127. Non-attendance by witness or failure to give evidence

128. Contempt of tax court

129. Decision by tax court

130. Order for costs by tax court

131. Registrar to notify parties of judgment of tax court

132. Publication of judgment of tax court

Part E

Appeal against tax court decision

133. Appeal against decision of tax court

134. Notice of intention to appeal tax court decision

135. Leave to appeal to Supreme Court of Appeal against tax court decision

136. Failure to lodge notice of intention to appeal tax court decision

137. Notice by registrar of period for appeal of tax court decision

138. Notice of appeal to Supreme Court of Appeal against tax court decision

139. Notice of cross-appeal of tax court decision

140. Record of appeal of tax court decision

141. Abandonment of judgment

Part F

Settlement of dispute

142. Definitions

143. Purpose of Part

144. Initiation of settlement procedure

145. Circumstances where settlement is inappropriate

146. Circumstances where settlement is appropriate

147. Procedure for settlement

148. Finality of settlement agreement

149. Register of settlements and reporting

150. Alteration of assessment or decision on settlement

CHAPTER 10

TAX LIABILITY AND PAYMENT

Part A

Taxpayers

151. Taxpayer

152. Person chargeable to tax

153. Representative taxpayer

154. Liability of representative taxpayer

155. Personal liability of representative taxpayer

156. Withholding agent

157. Personal liability of withholding agent

158. Responsible third party

159. Personal liability of responsible third party

160. Taxpayer’s right to recovery

161. Security by taxpayer

Part B

Payment of tax

162. Determination of time and manner of payment of tax

163. Preservation order

164. Payment of tax pending objection or appeal

Part C

Taxpayer account and allocation of payments

165. Taxpayer account

166. Allocation of payments

Part D

Deferral of payment

167. Instalment payment agreement

168. Criteria for instalment payment agreement

CHAPTER 11

RECOVERY OF TAX

Part A

General

169. Debt due to SARS

170. Evidence as to assessment

171. Period of limitation on collection of tax

Part B

Judgment procedure

172. Application for civil judgment for recovery of tax

173. Jurisdiction of Magistrates’ Court in judgment procedure

174. Effect of statement filed with clerk or registrar

175. Amendment of statement filed with clerk or registrar

176. Withdrawal of statement and reinstitution of proceedings

Part C

Sequestration, liquidation and winding-up proceedings

177. Institution of sequestration, liquidation or winding-up proceedings

178. Jurisdiction of court in sequestration, liquidation or winding-up proceedings

Part D

Collection of tax debt from third parties

179. Liability of third party appointed to satisfy tax debts

180. Liability of financial management for tax debts

181. Liability of shareholders for tax debts

182. Liability of transferee for tax debts

183. Liability of person assisting in dissipation of assets

184. Recovery of tax debts from other persons

Part E

Assisting foreign governments

185. Tax recovery on behalf of foreign governments

Part F

Remedies with respect to foreign assets

186. Compulsory repatriation of foreign assets of taxpayer

CHAPTER 12

INTEREST

187. General interest rules

188. Period over which interest accrues

189. Rate at which interest is charged

CHAPTER 13

REFUNDS

190. Refunds of excess payments

191. Refunds subject to set-off and deferral

CHAPTER 14

WRITE OFF OR COMPROMISE OF TAX DEBTS

Part A

General provisions

192. Definitions

193. Purpose of Chapter

194. Application of Chapter

Part B

Temporary write off of tax debt

195. Temporary write off of tax debt

196. Tax debt uneconomical to pursue

Part C

Permanent write off of tax debt

197. Permanent write off of tax debt

198. Tax debt irrecoverable at law

199. Procedure for writing off tax debt

Part D

Compromise of tax debt

200. Compromise of tax debt

201. Request by debtor for compromise of tax debt

202. Consideration of request to compromise tax debt

203. Circumstances where not appropriate to compromise tax debt

204. Procedure for compromise of tax debt

205. SARS not bound by compromise of tax debt

Part E

Records and reporting

206. Register of tax debts written off or compromised

207. Reporting by Commissioner of tax debts written off or compromised

CHAPTER 15

ADMINISTRATIVE NON-COMPLIANCE PENALTIES

Part A

General

208. Definitions

209. Purpose of Chapter

Part B

Fixed amount penalties

210. Non-compliance subject to penalty

211. Fixed amount penalty table

212. Reportable arrangement and mandatory disclosure penalty

Part C

Percentage based penalty

213. Imposition of percentage based penalty

Part D

Procedure

214. Procedures for imposing penalty

215. Procedure to request remittance of penalty

Part E

Remedies

216. Remittance of penalty for failure to register

217. Remittance of penalty for nominal or first incidence of non-compliance

218. Remittance of penalty in exceptional circumstances

219. Penalty incorrectly assessed

220. Objection and appeal against decision not to remit penalty

CHAPTER 16

UNDERSTATEMENT PENALTY

Part A

Imposition of understatement penalty

221. Definitions

222. Understatement penalty

223. Understatement penalty percentage table

224. Objection and appeal against imposition of understatement penalty

Part B

Voluntary disclosure programme

225. Definitions

226. Qualification of person subject to audit or investigation for voluntary disclosure

227. Requirements for valid voluntary disclosure

228. No-name voluntary disclosure

229. Voluntary disclosure relief

230. Voluntary disclosure agreement

231. Withdrawal of voluntary disclosure relief

232. Assessment or determination to give effect to agreement

233. Reporting of voluntary disclosure agreements

CHAPTER 17

CRIMINAL OFFENCES

234. Criminal offences relating to non-compliance with tax Acts

235. Evasion of tax and obtaining undue refunds by fraud or theft

236. Criminal offences relating to secrecy provisions

237. Criminal offences relating to filing return without authority

238. Jurisdiction of courts in criminal matters

CHAPTER 18

REGISTRATION OF TAX PRACTITIONERS AND REPORTING OF UNPROFESSIONAL CONDUCT

239. Definitions

240. Registration of tax practitioners

240A. Recognition of controlling bodies

241. Complaint to controlling body

242. Disclosure of information regarding complaint and remedies of taxpayer

243. Complaint considered by controlling body

CHAPTER 19

GENERAL PROVISIONS

244. Deadlines

245. Power of Minister to determine date for submission of returns and payment of tax

246. Public officers of companies

247. Company address for notices and documents

248. Public officer in event of liquidation, winding-up or business rescue

249. Default in appointing public officer or address for notices or documents

250. Authentication of documents

251. Delivery of documents to persons other than companies

252. Delivery of documents to companies

253. Documents delivered deemed to have been received

254. Defect does not affect validity

255. Rules for electronic communication

256. Tax compliance status

257. Regulations by Minister

CHAPTER 20

TRANSITIONAL PROVISIONS

258. New taxpayer reference number

259. Appointment of Tax Ombud

260. Provisions relating to secrecy

261. Public officer previously appointed

262. Appointment of chairpersons of tax board

263. Appointment of members of tax court

264. Continuation of tax board, tax court and court rules

265. Continuation of appointment to a post or office or delegation by Commissioner

266. Continuation of authority to audit

267. Conduct of inquiries and execution of search and seizure warrants

268. Application of Chapter 15

269. Continuation of authority, rights and obligations

270. Application of Act to prior or continuing action

271. Amendment of legislation

272. Short title and commencement

CHAPTER 1

DEFINITIONS

1. Definitions

In this Act, unless the context indicates otherwise, a term which is assigned a meaning in another tax Act has the meaning so assigned, and the following terms have the following meaning—

“additional assessment” is an assessment referred to in section 92;

“administration of a tax Act” has the meaning assigned in section 3(2);

“administrative non-compliance penalty” has the meaning assigned in section 208;

“assessment” means the determination of the amount of a tax liability or refund, by way of self‑assessment by the taxpayer or assessment by SARS;

“asset” includes—

(a) property of whatever nature, whether movable or immovable, corporeal or incorporeal; and

(b) a right or interest of whatever nature to or in the property;

[“asset” inserted by s 36(a) of Act 21 of 2012 with effect from 1 October 2012.]

‘‘beneficial owner’’—

(a) of a company, has the meaning assigned to it by section 1 of the Companies Act, 2008 (Act 71 of 2008);

(b) of a partnership, means a natural person who, directly or indirectly, ultimately owns, or exercises effective control of, the partnership, and includes—

(i) every partner, including every member of a partnership en commandite, an anonymous partnership or any similar partnership;

(ii) if a partner in the partnership is a legal person or a natural person acting on behalf of a partnership or in pursuance of the provisions of a trust agreement, the beneficial owner of that legal person, partnership or trust; and

(iii) the natural person who exercises executive control over the partnership; and

(c) of a trust, has the meaning assigned to it by section 1 of the Trust Property Control Act, 1988 (Act No. 57 of 1988);

["beneficial owner" inserted by s 25 of Act 18 of 2023 with effect from 22 December 2023.]

“biometric information” means biological data used to authenticate the identity of a natural person by means of—

(a) facial recognition;

(b) fingerprint recognition;

(d) iris or retina recognition; and

(e) other, less intrusive biological data, as may be prescribed by the Minister in a regulation issued under section 257;

“business day” means a day which is not a Saturday, Sunday or public holiday, and for purposes of determining the days or a period allowed for complying with the provisions of Chapter 9, excludes the days between 16 December of each year and 15 January of the following year, both days inclusive;

“Commissioner” means the Commissioner for the South African Revenue Service appointed in terms of section 6 of the SARS Act or the Acting Commissioner designated in terms of section 7 of that Act;

“company” has the meaning assigned in section 1 of the Income Tax Act;

“connected person” means a connected person as defined in section 1 of the Income Tax Act;

“customs and excise legislation” means the Customs and Excise Act, 1964 (Act 91 of 1964), the Customs Duty Act, 2014 (Act 30 of 2014), or the Customs Control Act, 2014 (Act 31 of 2014);

[“customs and excise legislation”, formerly “Customs and Excise Act”, substituted by s 33(a) of Act 23 of 2015 with effect from 8 January 2016.]

“date of assessment” means—

(a) in the case of an assessment by SARS, the date of the issue of the notice of assessment; or

(b) in the case of self-assessment by the taxpayer—

(i) if a return is required, the date that the return is submitted; or

(ii) if no return is required, the date of the last payment of the tax for the tax period or, if no payment was made in respect of the tax for the tax period, the effective date;

“date of sequestration” means—

(a) the date of voluntary surrender of an estate, if accepted by a court; or

(b) the date of provisional sequestration of an estate, if a final order of sequestration is granted by a court;

“Diamond Export Levy Act” means the Diamond Export Levy Act, 2007 (Act 15 of 2007);

“Diamond Export Levy (Administration) Act” means the Diamond Export Levy (Administration) Act, 2007 (Act 14 of 2007);

“document” means anything that contains a written, sound or pictorial record, or other record of information, whether in physical or electronic form;

“effective date” is the date described in section 187(3), (4) and (5) of this Act, or the date from when interest is otherwise calculated under a tax Act;

[“effective date” substituted by s 36(b) of Act 21 of 2012 with effect from 1 October 2012.]

“Estate Duty Act” means the Estate Duty Act, 1955 (Act 45 of 1955);

“fair market value” means the price which could be obtained upon a sale of an asset between a willing buyer and a willing seller dealing at arm’s length in an open market;

“income tax” means normal tax referred to in section 5 of the Income Tax Act;

“Income Tax Act” means the Income Tax Act, 1962 (Act 58 of 1962);

“information” includes information generated, recorded, sent, received, stored or displayed by any means;

“international tax agreement” means—

(a) an agreement entered into with the government of another country in accordance with a tax Act; or

(b) any other agreement entered into between the competent authority of the Republic and the competent authority of another country relating to the automatic exchange of information under an agreement referred to in paragraph (a);

[“international tax agreement” substituted by s 37(a) of Act 44 of 2014 with effect from 1 October 2012.]

“international tax standard” means—

(a) the OECD Standard for Automatic Exchange of Financial Account Information in Tax Matters;

(b) the Country-by-Country Reporting Standard for Multinational Enterprises specified by the Minister; or

(c) any other international standard for the exchange of tax-related information between countries specified by the Minister,

subject to such changes as specified by the Minister in a regulation issued under section 257;

[“international tax standard” inserted by s 33(b) of Act 23 of 2015 with effect from 8 January 2016.]

“jeopardy assessment” is an assessment referred to in section 94;

“judge” means a judge of the High Court of South Africa, whether in chambers or otherwise;

“magistrate” means a judicial officer as defined in section 1 of the Magistrates’ Courts Act, 1944 (Act 32 of 1944), whether in chambers or otherwise;

“Mineral and Petroleum Resources Royalty (Administration) Act” means the Mineral and Petroleum Resources Royalty (Administration) Act, 2008 (Act 29 of 2008);

“Minister” means the Minister of Finance;

“official publication” means a binding general ruling, interpretation note, practice note or public notice issued by a senior SARS official or the Commissioner;

“original assessment” is an assessment referred to in section 91;

“outstanding tax debt” means a tax debt not paid by the day referred to in section 162;

[“outstanding tax debt” inserted by s 30(a) of Act 39 of 2013 with effect from 1 October 2012.]

“practice generally prevailing” has the meaning assigned in section 5;

“premises” includes a building, aircraft, vehicle, vessel or place;

“prescribed rate” has the meaning assigned in section 189(3);

“presiding officer” is the person referred to in section 50(1);

“Promotion of Access to Information Act” means the Promotion of Access to Information Act, 2000 (Act 2 of 2000);

“public notice” means a notice published in the Government Gazette;

“public officer” is an officer referred to in section 246(1), (2) and (3);

“reduced assessment” is an assessment referred to in section 93;

“registered tax practitioner” means a person registered under section 240;

[“registered tax practitioner” inserted by s 36(c) of Act 21 of 2012 with effect from 1 October 2012.]

“relevant material” means any information, document or thing that in the opinion of SARS is foreseeably relevant for the administration of a tax Act as referred to in section 3;

[“relevant material” substituted by s 30(b) of Act 39 of 2013 with effect from 1 October 2012, s 37(b) of Act 44 of 2014 with effect from 1 October 2012.]

“reportable arrangement” has the meaning assigned in section 35;

“representative taxpayer” has the meaning assigned in section 153(1);

“responsible third party” has the meaning assigned under section 158;

“return” means a form, declaration, document or other manner of submitting information to SARS that incorporates a self-assessment, is a basis on which an assessment is to be made by SARS or incorporates relevant material required under section 25, 26 or 27 or a provision under a tax Act requiring the submission of a return;

[“return” substituted by s 30(c) of Act 39 of 2013 with effect from 1 October 2012, s 37(c) of Act 44 of 2014 with effect from 1 October 2012.]

“SARS” means the South African Revenue Service established under the SARS Act;

“SARS Act” means the South African Revenue Service Act, 1997 (Act 34 of 1997);

“SARS confidential information” has the meaning assigned under section 68(1);

“SARS official” means—

(a) the Commissioner;

(b) an employee of SARS; or

(c) a person contracted or engaged by SARS, other than an external legal representative, for purposes of the administration of a tax Act and who carries out the provisions of a tax Act under the control, direction or supervision of the Commissioner;

[“SARS official” amended by s 36(d) of Act 21 of 2012 with effect from 1 October 2012; substituted by s 47 of Act 16 of 2016 with effect from 19 January 2017.]

“Securities Transfer Tax Act” means the Securities Transfer Tax Act, 2007 (Act 25 of 2007);

“Securities Transfer Tax Administration Act” means the Securities Transfer Tax Administration Act, 2007 (Act 26 of 2007);

“self-assessment” means a determination of the amount of tax payable under a tax Act by a taxpayer and—

(a) submitting a return which incorporates the determination of the tax; or

(b) if no return is required, making a payment of the tax;

“senior SARS official” is a SARS official referred to in section 6(3);

“serious tax offence” means a tax offence for which a person may be liable on conviction to imprisonment for a period exceeding two years without the option of a fine or to a fine exceeding the equivalent amount of a fine under the Adjustment of Fines Act, 1991 (Act 101 of 1991);

“shareholder” means a person who holds a beneficial interest in a company as defined in the Income Tax Act;

[“shareholder” substituted by s 36(e) of Act 21 of 2012 with effect from 1 October 2012.]

“Skills Development Levies Act” means the Skills Development Levies Act, 1999 (Act 9 of 1999);

“tax”, for purposes of administration under this Act, includes a tax, duty, levy, royalty, fee, contribution, penalty, interest and any other moneys imposed under a tax Act;

“taxable event” means an occurrence which affects or may affect the liability of a person to tax;

“tax Act” means this Act or an Act, or portion of an Act, referred to in section 4 of the SARS Act, excluding customs and excise legislation;

[“tax Act” substituted by s 37(d) of Act 44 of 2014 with effect from 1 October 2012, s 33(c) of Act 23 of 2015 with effect from 8 January 2016.]

“tax board” means a tax board established under section 108;

“tax court” means a court established under section 116;

“tax debt” means an amount referred to in section 169(1);

[“tax debt” substituted by s 30(d) of Act 39 of 2013 with effect from 1 October 2012.]

“tax offence” means an offence in terms of a tax Act or any other offence involving—

(a) fraud on SARS or on a SARS official relating to the administration of a tax Act; or

(b) theft of moneys due or paid to SARS for the benefit of the National Revenue Fund;

[“tax offence” substituted by s 37(e) of Act 44 of 2014 with effect from 1 October 2012.]

“Tax Ombud” is the person appointed by the Minister under section 14;

“tax period” means, in relation to—

(a) income tax, a year of assessment as defined in section 1 of the Income Tax Act;

(b) provisional tax or employees’ tax, skills development levies as determined in section 3 of the Skills Development Levies Act, and contributions as determined in section 6 of the Unemployment Insurance Contributions Act, the period in respect of which the amount of tax payable must be determined under the relevant tax Act;

(c) value-added tax, a tax period determined under section 27 of the Value-Added Tax Act or the period or date of the taxable event in respect of which the amount of tax payable must be determined under that Act;

(d) royalty payable on the transfer of mineral and petroleum resources, a year of assessment as defined in section 1 of the Mineral and Petroleum Resources Royalty (Administration) Act;

(e) the levy on diamond exports as determined under section 2 of the Diamond Export Levy Act, the assessment period referred to in section 1 of the Diamond Export Levy (Administration) Act;

(f) securities transfer tax, the period referred to in section 3 of the Securities Transfer Tax Administration Act;

(g) any other tax, the period or date of the taxable event in respect of which the amount of tax payable must be determined under a tax Act; or

(h) a jeopardy assessment, the period determined under this Act;

“taxpayer” has the meaning assigned under section 151;

“taxpayer information” has the meaning assigned under section 67(1)(b);

“taxpayer reference number” is the number referred to in section 24;

“thing” includes a corporeal or incorporeal thing;

“this Act” includes the regulations and a public notice issued under this Act;

“Transfer Duty Act” means the Transfer Duty Act, 1949 (Act 40 of 1949);

“understatement penalty” means a penalty imposed by SARS in accordance with Part A of Chapter 16;

“Unemployment Insurance Contributions Act” means the Unemployment Insurance Contributions Act, 2002 (Act 4 of 2002);

“Value-Added Tax Act” means the Value-Added Tax Act, 1991 (Act 89 of 1991);

“withholding agent” has the meaning assigned under section 156.

CHAPTER 2

GENERAL ADMINISTRATION PROVISIONS

Part A

In general

2. Purpose of Act

The purpose of this Act is to ensure the effective and efficient collection of tax by—

(a) aligning the administration of the tax Acts to the extent practically possible;

(b) prescribing the rights and obligations of taxpayers and other persons to whom this Act applies;

(d) generally giving effect to the objects and purposes of tax administration.

3. Administration of tax Acts

(1) SARS is responsible for the administration of this Act under the control or direction of the Commissioner.

(2) Administration of a tax Act means to—

(a) obtain full information in relation to—

(i) anything that may affect the liability of a person for tax in respect of a previous, current or future tax period;

(ii) a taxable event; or

(iii) the obligation of a person (whether personally or on behalf of another person) to comply with a tax Act;

(b) ascertain whether a person has filed or submitted correct returns, information or documents in compliance with the provisions of a tax Act;

(d) determine the liability of a person for tax;

(e) collect tax debts and refund tax overpaid;

[S 3(2)(e) substituted by s 31 of Act 39 of 2013 with effect from 1 October 2012.]

(f) investigate whether a tax offence has been committed, and, if so—

(i) to lay criminal charges; and

(ii) to provide the assistance that is reasonably required for the investigation and prosecution of the tax offence;

[S 3(2)(f) substituted by s 37(a) of Act 21 of 2012 with effect from 1 October 2012.]

(g) enforce SARS’ powers and duties under a tax Act to ensure that an obligation imposed by or under a tax Act is complied with;

(h) perform any other administrative function necessary to carry out the provisions of a tax Act;

[S 3(2)(h) amended by s 34(a) of Act 23 of 2015 with effect from 8 January 2016.]

(i) give effect to the obligation of the Republic to provide assistance under an international tax agreement; and

[S 3(2)(i) amended by s 34(a) of Act 23 of 2015 with effect from 8 January 2016.]

(j) give effect to an international tax standard.

[S 3(2)(j) inserted by s 34(a) of Act 23 of 2015 with effect from 8 January 2016.]

(3) If SARS, in accordance with—

(a) an international tax agreement—

(i) received a request for, is obliged to exchange or wishes to spontaneously exchange information, SARS may disclose or obtain the information for transmission to the competent authority of the other country as if it were relevant material required for purposes of a tax Act and must treat the information obtained as taxpayer information;

(ii) received a request for the conservancy or the collection of an amount alleged to be due by a person under the tax laws of the requesting country, SARS may deal with the request under the provisions of section 185; or

(iii) received a request for the service of a document which emanates from the requesting country, SARS may effect service of the document as if it were a notice, document or other communication required under a tax Act to be issued, given, sent or served by SARS; or

(b) an international tax standard, obtained information of a person, SARS may retain the information as if it were relevant material required for purposes of a tax Act and must treat the information obtained as taxpayer information.

[S 3(3) amended by s 37 of Act 21 of 2012 with effect from 1 October 2012; substituted by s 38 of Act 44 of 2014 with effect from 1 October 2012, s 34(b) of Act 23 of 2015 with effect from 8 January 2016.]

4. Application of Act

(1) This Act applies to every person who is liable to comply with a provision of a tax Act (whether personally or on behalf of another person) and binds SARS.

(2) If this Act is silent with regard to the administration of a tax Act and it is specifically provided for in the relevant tax Act, the provisions of that tax Act apply.

(3) In the event of any inconsistency between this Act and another tax Act, the other Act prevails.

5. Practice generally prevailing

(1) A practice generally prevailing is a practice set out in an official publication regarding the application or interpretation of a tax Act.

(2) Despite any provision to the contrary contained in a tax Act, a practice generally prevailing set out in an official publication, other than a binding general ruling, ceases to be a practice generally prevailing if—

(a) the provision of the tax Act that is the subject of the official publication is repealed or amended to an extent material to the practice, from the date the repeal or amendment becomes effective;

(b) a court overturns or modifies an interpretation of the tax Act which is the subject of the official publication to an extent material to the practice from the date of judgment, unless—

(i) the decision is under appeal;

(ii) the decision is fact-specific and the general interpretation upon which the official publication was based is unaffected; or

(iii) the reference to the interpretation upon which the official publication was based was obiter dicta; or

(c) the official publication is withdrawn or modified by the Commissioner, from the date of the official publication of the withdrawal or modification.

(3) A binding general ruling ceases to be a practice generally prevailing in the circumstances described in section 85 or 86.

Part B

Powers and duties of SARS and SARS officials

6. Powers and duties

(1) The powers and duties of SARS under this Act may be exercised for purposes of the administration of a tax Act.

(2) Powers and duties which are assigned to the Commissioner by this Act must be exercised by the Commissioner personally but he or she may delegate such powers and duties in accordance with section 10.

(3) Powers and duties required by this Act to be exercised by a senior SARS official must be exercised by—

(a) the Commissioner;

(b) a SARS official who has specific written authority from the Commissioner to do so; or

[S 6(3)(c) substituted by s 38(a) of Act 21 of 2012 with effect from 1 October 2012.]

(4) The execution of a task ancillary to a power or duty under subsection (2) or (3) may be done by a SARS official under the control of an official referred to in subsection (3)(a), (b) or (c).

[S 6(4) amended by s 38(b) of Act 21 of 2012 with effect from 1 October 2012; substituted by s 35 of Act 23 of 2015 with effect from 8 January 2016.]

(5) Powers and duties not specifically required by this Act to be exercised by the Commissioner or by a senior SARS official, may be exercised by a SARS official.

[S 6(5) substituted by s 38(c) of Act 21 of 2012 with effect from 1 October 2012.]

(6) The Commissioner may by public notice specify that a power or duty in a tax Act other than this Act must be exercised by the Commissioner personally or a senior SARS official.

7. Conflict of interest

The Commissioner or a SARS official may not exercise a power or become involved in a matter pertaining to the administration of a tax Act, if—

(a) the power or matter relates to a taxpayer in respect of which the Commissioner or the official has or had, in the previous three years, a personal, family, social, business, professional, employment or financial relationship presenting a conflict of interest; or

(b) other circumstances present a conflict of interest,

that will reasonably be regarded as giving rise to bias.

8. Identity cards

(1) SARS may issue an identity card to each SARS official exercising powers and duties for purposes of the administration of a tax Act.

[S 8(1) substituted by s 39 of Act 21 of 2012 with effect from 1 October 2012.]

(2) When a SARS official exercises a power or duty for purposes of the administration of a tax Act in person outside SARS premises, the official must produce the identity card upon request by a member of the public.

[S 8(2) substituted by s 39 of Act 21 of 2012 with effect from 1 October 2012.]

(3) If the official does not produce the identity card, a member of the public is entitled to assume that the person is not a SARS official.

9. Decision or notice by SARS

(1) A decision made by a SARS official or a notice to a specific person issued by SARS under a tax Act, excluding a decision given effect to in an assessment or a notice of assessment that is subject to objection and appeal, may in the discretion of a SARS official described in paragraph (a), (b) or (c) or at the request of the relevant person, be withdrawn or amended by—

(a) the SARS official;

(b) a SARS official to whom the SARS official reports; or

[S 9(1) substituted by s 22(a) of Act 13 of 2017 with effect from 18 December 2017.]

(2) If all the material facts were known to the SARS official at the time the decision was made, a decision or notice referred to in subsection (1) may not be withdrawn or amended with retrospective effect, after three years from the later of the—

(a) date of the written notice of that decision; or

(b) date of assessment or the notice of assessment giving effect to the decision (if applicable).

(3) A decision made by a SARS official or a notice to a specific person issued by SARS under a tax Act is regarded as made by a SARS official authorised to do so or duly issued by SARS, until proven to the contrary.

[S 9(3) inserted by s 22(b) of Act 13 of 2017 with effect from 18 December 2017.]

Part C

Delegations

10. Delegations by the Commissioner

(1) A delegation by the Commissioner under section 6(2)—

(a) must be in writing;

(b) becomes effective only when signed by the Commissioner;

[S 10(1)(b) substituted by s 32 of Act 39 of 2013 with effect from 1 October 2012.]

(d) may either be to—

(i) a specific individual; or

(ii) the incumbent of a specific post; and

(e) may be amended or withdrawn by the Commissioner.

(2) A delegation does not divest the Commissioner of the responsibility for the exercise of the delegated power or the performance of the delegated duty.

Part D

Authority to act in legal proceedings

11. Legal proceedings involving Commissioner

[S 11 heading substituted by s 33(a) of Act 39 of 2013 with effect from 1 October 2012.]

(1) No SARS official may institute or defend civil proceedings on behalf of the Commissioner unless authorised to do so under this Act or by the Commissioner or by the person delegated by the Commissioner under section 6(2).

[S 11(1) substituted by s 36 of Act 23 of 2015 with effect from 8 January 2016.]

(2) For purposes of subsection (1), a SARS official who, on behalf of the Commissioner, institutes litigation, or performs acts which are relied upon by the Commissioner in litigation, is regarded as duly authorised until proven to the contrary.

(3) An amount due or payable as a result of a cost order in favour of SARS recovered by the State Attorney resulting from any civil proceedings under this Act must be paid to the National Revenue Fund.

[S 11(3) substituted by s 40 of Act 21 of 2012 with effect from 1 October 2012, s 33(b) of Act 39 of 2013 with effect from 1 October 2012, s 48 of Act 16 of 2016 with effect from 19 January 2017.]

(4) Unless the court otherwise directs, no legal proceedings may be instituted in the High Court against the Commissioner, unless the applicant has given the Commissioner written notice of at least 10 business days of the applicant’s intention to institute the legal proceedings.

[S 11(4) inserted by s 33(c) of Act 39 of 2013 with effect from 1 October 2012; amended by s 27 of Act 33 of 2019 with effect from 15 January 2020.]

(5) The notice or any process by which the legal proceedings referred to in subsection (4) are instituted, must be served at the address specified by the Commissioner by public notice.

[S 11(5) inserted by s 33(c) of Act 39 of 2013 with effect from 1 October 2012.]

12. Right of appearance in proceedings

(1) Despite any law to the contrary, a senior SARS official may, on behalf of SARS or the Commissioner in proceedings referred to in a tax Act, appear ex parte in a judge’s chambers, in the tax court or in a High Court.

[S 12(1) amended by s 24 of Act 24 of 2020 with effect from 20 January 2021.]

(2) A senior SARS official may appear in the tax court or a High Court only if the person is a legal practitioner duly admitted and enrolled under the Legal Practice Act, 2014 (Act 28 of 2014).

[S 12(2) substituted by s 28 of Act 33 of 2019 with effect from 15 January 2020.]

Part E

Powers and duties of Minister

13. Powers and duties of Minister

(1) The powers conferred and the duties imposed upon the Minister by or under the provisions of a tax Act may—

(a) be exercised or performed by the Minister personally; and

(b) except for the powers under sections 14 and 257, be delegated by the Minister to the Deputy Minister or Director-General of the National Treasury.

(2) The Director-General may in turn delegate the powers and duties delegated to the Director-General by the Minister to a person under the control, direction or supervision of the Director-General.

14. Power of Minister to appoint Tax Ombud

(1) The Minister must appoint a person as Tax Ombud—

(a) for a term of five years, which term may be renewed; and

[S 14(1)(a) substituted by s 49 of Act 16 of 2016 with effect from 19 January 2017.]

(b) under such conditions regarding remuneration and allowances as the Minister may determine.

(2) The person appointed under subsection (1) or (3) may be removed by the Minister for misconduct, incapacity or incompetence.

(3) During a vacancy in the office of Tax Ombud, the Minister may designate a person in the office of the Tax Ombud to act as Tax Ombud.

(4) No person may be designated in terms of subsection (3) as acting Tax Ombud for a period longer than 90 days at a time.

(5) A person appointed as Tax Ombud—

(a) is accountable to the Minister;

(b) must have a good background in customer service as well as tax law; and

(i) theft, fraud, forgery or uttering a forged document, perjury, an offence under the Prevention and Combating of Corrupt Activities Act, 2004 (Act 12 of 2004); or

(ii) any other offence involving dishonesty,

for which the person has been sentenced to a period of imprisonment exceeding two years without the option of a fine or to a fine exceeding the amount prescribed in the Adjustment of Fines Act, 1991 (Act 101 of 1991).

Part F

Powers and duties of Tax Ombud

15. Office of Tax Ombud

(1) The Tax Ombud must appoint the staff of the office of the Tax Ombud who must be employed in terms of the SARS Act.

[S 15(1) substituted by s 50(a) of Act 16 of 2016 with effect from 19 January 2017.]

(2) When the Tax Ombud is absent or otherwise unable to perform the functions of office, the Tax Ombud may designate another person in the office of the Tax Ombud as acting Tax Ombud.

(3) No person may be designated in terms of subsection (2) as acting Tax Ombud for a period longer than 90 days at a time.

(4) The expenditure connected with the functions of the office of the Tax Ombud is paid in accordance with a budget approved by the Minister for the office.

[S 15(4) substituted by s 50(b) of Act 16 of 2016 with effect from 19 January 2017.]

16. Mandate of Tax Ombud

(1) The mandate of the Tax Ombud is to—

(a) review and address any complaint by a taxpayer regarding a service matter or a procedural or administrative matter arising from the application of the provisions of a tax Act by SARS; and

(b) review, at the request of the Minister or at the initiative of the Tax Ombud with the approval of the Minister, any systemic and emerging issue related to a service matter or the application of the provisions of this Act or procedural or administrative provisions of a tax Act.

[S 16(1) substituted by s 51 of Act 16 of 2016 with effect from 19 January 2017.]

(2) In discharging his or her mandate, the Tax Ombud must—

(a) review a complaint and, if necessary, resolve it through mediation or conciliation;

(b) act independently in resolving a complaint;

(d) provide information to a taxpayer about the mandate of the Tax Ombud and the procedures to pursue a complaint;

(e) facilitate access by taxpayers to complaint resolution mechanisms within SARS to address complaints; and

(f) identify and review systemic and emerging issues related to service matters or the application of the provisions of this Act or procedural or administrative provisions of a tax Act that impact negatively on taxpayers.

17. Limitations on authority

The Tax Ombud may not review—

(a) legislation or tax policy;

(b) SARS policy or practice generally prevailing, other than to the extent that it relates to a service matter or a procedural or administrative matter arising from the application of the provisions of a tax Act by SARS;

(c) a matter subject to objection and appeal under a tax Act, except for an administrative matter relating to such objection and appeal; or

(d) a decision of, proceeding in or matter before the tax court.

18. Review of complaint

(1) The Tax Ombud may review any issue within the Tax Ombud’s mandate on receipt of a request from a taxpayer.

(2) The Tax Ombud may—

(a) determine how a review is to be conducted; and

(b) determine whether a review should be terminated before completion.

(3) In exercising the discretion set out in subsection (2), the Tax Ombud must consider such factors as—

(a) the age of the request or issue;

(b) the amount of time that has elapsed since the requester became aware of the issue;

(d) the question of whether the request was made in good faith; and

(e) the findings of other redress mechanisms with respect to the request.

(4) The Tax Ombud may only review a request if the requester has exhausted the available complaints resolution mechanisms in SARS, unless there are compelling circumstances for not doing so.

(5) To determine whether there are compelling circumstances, the Tax Ombud must consider factors such as whether—

(a) the request raises systemic issues;

(b) exhausting the complaints resolution mechanisms will cause undue hardship to the requester; or

(c) exhausting the complaints resolution mechanisms is unlikely to produce a result within a period of time that the Tax Ombud considers reasonable.

(6) The Tax Ombud must inform the requester of the results of the review or any action taken in response to the request, but at the time and in the manner chosen by the Tax Ombud.

19. Reports by Tax Ombud

(1) The Tax Ombud must—

(a) report directly to the Minister;

(b) submit an annual report to the Minister within five months of the end of SARS’ financial year; and

(2) The reports must—

(a) contain a summary of at least 10 of the most serious issues encountered by taxpayers and identified systemic and emerging issues referred to in section 16(2)(f), including a description of the nature of the issues;

(b) contain an inventory of the issues described in subparagraph (a) for which—

(i) action has been taken and the result of such action;

(ii) action remains to be completed and the period during which each item has remained on such inventory; or

(iii) no action has been taken, the period during which each item has remained on such inventory and the reasons for the inaction; and

(c) contain recommendations for such administrative action as may be appropriate to resolve problems encountered by taxpayers.

(3) The Minister must table the annual report of the Tax Ombud in the National Assembly.

20. Resolution and recommendations

(1) The Tax Ombud must attempt to resolve all issues within the Tax Ombud’s mandate at the level at which they can most efficiently and effectively be resolved and must, in so doing, communicate with SARS officials identified by SARS.

(2) The Tax Ombud’s recommendations are not binding on a taxpayer or SARS, but if not accepted by a taxpayer or SARS, reasons for such decision must be provided to the Tax Ombud within 30 days of notification of the recommendations and may be included by the Tax Ombud in a report to the Minister or the Commissioner under section 19.

[S 20(2) substituted by s 52 of Act 16 of 2016 with effect from 19 January 2017.]

21. Confidentiality

(1) The provisions of Chapter 6 apply with the changes required by the context for the purpose of this Part.

(2) SARS must allow the Tax Ombud access to information in the possession of SARS that relates to the Tax Ombud’s powers and duties under this Act.

(3) The Tax Ombud and any person acting on the Tax Ombud’s behalf may not disclose information of any kind that is obtained by or on behalf of the Tax Ombud, or prepared from information obtained by or on behalf of the Tax Ombud, to SARS, except to the extent required for the purpose of the performance of functions and duties under this Part.

CHAPTER 3

REGISTRATION

22. Registration requirements

(1) A person—

(a) obliged to apply to; or

(b) who may voluntarily,

register with SARS under a tax Act must do so in terms of the requirements of this Chapter or, if applicable, the relevant tax Act.

(2) A person referred to in subsection (1) must—

(a) apply for registration within the period provided for in a tax Act or, if no such period is provided for, 21 business days of so becoming obliged or within the further period as SARS may approve in the prescribed form and manner;

(b) apply for registration for one or more taxes or under section 26(3) in the prescribed form and manner; and

[S 22(2)(b) substituted by s 37(a) of Act 23 of 2015 with effect from 8 January 2016.]

(c) provide SARS with the further particulars and any documents as SARS may require for the purpose of registering the person for the tax or taxes or under section 26(3).

[S 22(2)(c) substituted by s 37(a) of Act 23 of 2015 with effect from 8 January 2016.]

(3) A person registered or applying for registration under a tax Act may be required to submit biometric information in the prescribed form and manner if the information is required to ensure—

(a) proper identification of the person; or

(b) counteracting identity theft or fraud.

(4) A person who applies for registration in terms of this Chapter and has not provided all particulars and documents required by SARS, may be regarded not to have applied for registration until all the particulars and documents have been provided to SARS.

(5) Where a person that is obliged to register with SARS under a tax Act fails to do so, SARS may register the person for one or more tax types as is appropriate under the circumstances or for purposes of section 26(3).

[S 22(5) substituted by s 37(b) of Act 23 of 2015 with effect from 8 January 2016.]

23. Communication of changes in particulars

A person who has been registered under section 22 must communicate to SARS within 21 business days any change that relates to—

(a) postal address;

(b) physical address;

(d) banking particulars used for transactions with SARS;

(e) electronic address used for communication with SARS; or

(f) such other details as the Commissioner may require by public notice.

24. Taxpayer reference number

(1) SARS may allocate a taxpayer reference number in respect of one or more taxes to each person registered under a tax Act or this Chapter.

(2) SARS may register and allocate a taxpayer reference number to a person who is not registered.

(3) A person who has been allocated a taxpayer reference number by SARS must include the relevant reference number in all returns or other documents submitted to SARS.

(4) SARS may regard a return or other document submitted by a person to be invalid if it does not contain the reference number referred to in subsection (3) and must inform the person accordingly if practical.

CHAPTER 4

RETURNS AND RECORDS

Part A

General

25. Submission of return

(1) A person required under a tax Act or by the Commissioner to submit or who voluntarily submits a return must do so—

[S 25(1), words preceding (a), substituted by s 34 of Act 39 of 2013 with effect from 1 October 2012.]

(a) in the prescribed form and manner; and

(b) by the date specified in the tax Act or, in its absence, by the date specified by the Commissioner in the public notice requiring the submission.

(2) A return must contain the information prescribed by a tax Act or the Commissioner and be a full and true return.

(3) A return must be signed by the taxpayer or by the taxpayer’s duly authorised representative and the person signing the return is regarded for all purposes in connection with a tax Act to be cognisant of the statements made in the return.

(4) Non-receipt by a person of a return form does not affect the obligation to submit a return.

(5) SARS may, prior to the issue of an original assessment by SARS, request a person to submit an amended return to correct an undisputed error in a return.

(6) SARS may extend the time period for filing a return in a particular case, in accordance with procedures and criteria in policies published by the Commissioner.

(7) The Commissioner may also extend the filing deadline generally or for specific classes of persons by public notice.

(8) An extension under subsection (6) or (7) does not affect the deadline for paying the tax.

26. Third party returns

(1) The Commissioner may by public notice, at the time and place and by the due date specified, require a person who employs, pays amounts to, receives amounts on behalf of or otherwise transacts with another person, or has control over assets of another person, to submit a return by the date specified in the notice.

[S 26(1) substituted by s 35 of Act 39 of 2013 with effect from 1 October 2012.]

(2) A person required under subsection (1) to submit a return must do so in the prescribed form and manner and the return must—

(a) contain the information prescribed by the Commissioner;

(b) be a full and true return; and

(c) for purposes of providing the information required in the return, comply with the due diligence requirements as may be prescribed in a tax Act, an international tax agreement, an international tax standard or by the Commissioner in a public notice consistent with the international tax agreement or the international tax standard.

[S 26(2)(c) substituted by s 38(a) of Act 23 of 2015 with effect from 8 January 2016.]

[S 26(2) substituted by s 39 of Act 44 of 2014 with effect from 1 October 2012.]

(3) The Commissioner may, by public notice, require a person to apply to register as a person required to submit a return under this section, an international tax agreement or an international tax standard.

[S 26(3) inserted by s 38(b) of Act 23 of 2015 with effect from 8 January 2016.]

(4) If, in order to submit a return under subsection (1) and to comply with the requirements of this section, a person requires information, a document or thing from another person, the other person must provide the information, document or thing so required within a reasonable time.

[S 26(4) inserted by s 38(b) of Act 23 of 2015 with effect from 8 January 2016.]

[S 26 substituted by s 41 of Act 21 of 2012 with effect from 1 October 2012.]

27. Other returns required

(1) A senior SARS official may require a person to submit further or more detailed returns regarding any matter for which a return under section 25 or 26 is required or prescribed by a tax Act.

(2) A person required under subsection (1) to submit a return must do so in the prescribed form and manner and the return must contain the information prescribed by the official and must be a full and true return.

[S 27 substituted by s 42 of Act 21 of 2012 with effect from 1 October 2012, s 36 of Act 39 of 2013 with effect from 1 October 2012.]

28. Statement concerning accounts

(1) SARS may require a person who submits financial statements or accounts prepared by another person in support of that person’s submitted return, to submit a certificate or statement by the other person setting out the details of—

(a) the extent of the other person’s examination of the books of account and of the documents from which the books of account were written up; and

(b) whether or not the entries in those books and documents disclose the true nature of the transactions, receipts, accruals, payments or debits in so far as may be ascertained by that examination.

(2) A person who prepares financial statements or accounts for another person must, at the request of that other person, submit to that other person a copy of the certificate or statement referred to in subsection (1).

29. Duty to keep records

(1) A person must keep the records, books of account or documents that—

(a) enable the person to observe the requirements of a tax Act;

(b) are specifically required under a tax Act or by the Commissioner by public notice; and

[S 29(1)(b) substituted by s 43(a) of Act 21 of 2012 with effect from 1 October 2012.]

(2) The requirements of this Act to keep records, books of account or documents for a tax period apply to a person who—

[S 29(2), words preceding (a), substituted by s 43(b) of Act 21 of 2012 with effect from 1 October 2012.]

(a) has submitted a return for the tax period;

(b) is required to submit a return for the tax period and has not submitted a return for the tax period; or

(c) is not required to submit a return but has, during the tax period, received income, has a capital gain or capital loss, or engaged in any other activity that is subject to tax or would be subject to tax but for the application of a threshold or exemption.

(3) Records, books of account or documents need not be retained by the person described in—

[S 29(3), words preceding (a), substituted by s 43(c) of Act 21 of 2012 with effect from 1 October 2012.]

(a) subsection (2)(a), after a period of five years from the date of the submission of the return; and

(b) subsection (2)(c), after a period of five years from the end of the relevant tax period.

30. Form of records kept or retained

(1) The records, books of account, and documents referred to in section 29, must be kept or retained—

(a) in their original form in an orderly fashion and in a safe place;

(b) in the form, including electronic form, as may be prescribed by the Commissioner in a public notice; or

(2) A senior SARS official may, subject to the conditions as the official may determine, authorise the retention of information contained in records, books of account or documents referred to in section 29 in a form acceptable to the official.

31. Inspection of records

The records, books of account and documents referred to in section 29 whether in the form referred to in section 30(1) or in a form authorised under section 30(2), must at all reasonable times during the required periods under section 29, be open for inspection by a SARS official in the Republic for the purpose of—

(a) determining compliance with the requirements of sections 29 and 30; or

(b) an inspection, audit or investigation under Chapter 5.

32. Retention period in case of audit, objection or appeal

Despite section 29(3), if—

(a) records, books of account or documents are relevant to an audit or investigation under Chapter 5 which the person, subject to the audit or investigation has been notified of or is aware of; or

[S 32(a) substituted by s 44(a) of Act 21 of 2012 with effect from 1 October 2012.]

(b) a person lodges an objection or appeal against an assessment or decision under section 104(2),

the person must retain the records, books of account or documents relevant to the audit, investigation, objection or appeal until the audit or investigation is concluded or the assessment or the decision becomes final.

[S 32, words following (b), substituted by s 44(b) of Act 21 of 2012 with effect from 1 October 2012.]

33. Translation

(1) In the case of information that is not in one of the official languages of the Republic, a senior SARS official may by notice require a person who must furnish the information to SARS, to produce a translation in one of the official languages determined by the official within a reasonable period.

(2) A translation referred to in subsection (1) must—

(a) be produced at a time and at the place specified by the notice; and

(b) if required by SARS, be prepared and certified by a sworn and accredited translator or another person approved by the senior SARS official.

Part B

Reportable arrangements

34. Definitions

In this Part and in section 212, unless the context indicates otherwise, the following terms, if in single quotation marks, have the following meanings—

‘arrangement’ means any transaction, operation, scheme, agreement or understanding (whether enforceable or not);

‘financial benefit’ means a reduction in the cost of finance, including interest, finance charges, costs, fees and discounts on a redemption amount;

‘financial reporting standards’ means, in the case of a company required to submit financial statements in terms of the Companies Act, 2008 (Act 71 of 2008), financial reporting standards prescribed by that Act, or, in any other case, the International Financial Reporting Standards or appropriate financial reporting standards that provide a fair presentation of the financial results and position of the taxpayer;

[‘financial reporting standards’ substituted by s 37 of Act 39 of 2013 with effect from 1 October 2012.]

‘participant’, in relation to an ‘arrangement’, means—

(a) a ‘promoter’;

(b) a person who directly or indirectly will derive or assumes that the person will derive a ‘tax benefit’ or ‘financial benefit’ by virtue of an ‘arrangement’; or

[‘participant’ substituted by s 40(1)(a) of Act 44 of 2014 with effect from 20 January 2015, s 39 of Act 23 of 2015 with effect from 8 January 2016.]

‘pre-tax profit’, in relation to an ‘arrangement’, means the profit of a ‘participant’ resulting from that ‘arrangement’ before deducting normal tax, which profit must be determined in accordance with ‘financial reporting standards’ after taking into account all costs and expenditure incurred by the ‘participant’ in connection with the ‘arrangement’ and after deducting any foreign tax paid or payable by the ‘participant’ in connection with the ‘arrangement’;

‘promoter’, in relation to an ‘arrangement’, means a person who is principally responsible for organising, designing, selling, financing or managing the ‘arrangement’;

[‘promoter’ substituted by s 40(1)(b) of Act 44 of 2014 with effect from 20 January 2015.]

‘reportable arrangement’ means an ‘arrangement’ referred to in section 35(1) or 35(2) that is not an excluded ‘arrangement’ referred to in section 36;

[‘reportable arrangement’ inserted by s 40(1)(c) of Act 44 of 2014 with effect from 20 January 2015.]

‘tax benefit’ means the avoidance, postponement, reduction or evasion of a liability for tax.

[‘tax benefit’ substituted by s 40(1)(d) of Act 44 of 2014 with effect from 20 January 2015.]

[S 34 amended by s 45 of Act 21 of 2012 with effect from 1 October 2012.]

35. Reportable arrangements

(1) An ‘arrangement’ is a ‘reportable arrangement’ if a person is a ‘participant’ in the ‘arrangement’ and the ‘arrangement’—

[S 35(1), words preceding (a), substituted by s 41(1)(a) of Act 44 of 2014 with effect from 20 January 2015.]

(a) contains provisions in terms of which the calculation of interest as defined in section 24J of the Income Tax Act, finance costs, fees or any other charges is wholly or partly dependent on the assumptions relating to the tax treatment of that ‘arrangement’ (otherwise than by reason of any change in the provisions of a tax Act);

(b) has any of the characteristics contemplated in section 80C(2)(b) of the Income Tax Act, or substantially similar characteristics;

(c) gives rise to an amount that is or will be disclosed by any ‘participant’ in any year of assessment or over the term of the ‘arrangement’ as—

(i) a deduction for purposes of the Income Tax Act but not as an expense for purposes of ‘financial reporting standards’; or

(ii) revenue for purposes of ‘financial reporting standards’ but not as gross income for purposes of the Income Tax Act;

(d) does not result in a reasonable expectation of a ‘pre-tax profit’ for any ‘participant’; or

(e) results in a reasonable expectation of a ‘pre-tax profit’ for any ‘participant’ that is less than the value of that ‘tax benefit’ to that ‘participant’ if both are discounted to a present value at the end of the first year of assessment when that ‘tax benefit’ is or will be derived or is assumed to be derived, using consistent assumptions and a reasonable discount rate for that ‘participant’.

(2) An ‘arrangement’ is a ‘reportable arrangement’ if the Commissioner has listed the ‘arrangement’ in a public notice.

[S 35(2) substituted by s 41(1)(b) of Act 44 of 2014 with effect from 20 January 2015.]

(3) ...

[S 35(3) repealed by s 41(1)(c) of Act 44 of 2014 with effect from 20 January 2015.]

36. Excluded arrangements

(1) An ‘arrangement’ is an excluded ‘arrangement’ if it is—

(a) a debt in terms of which—

[S 36(1)(a), words preceding (i), substituted by s 46 of Act 21 of 2012 with effect from 1 October 2012.]

(i) the borrower receives or will receive an amount of cash and agrees to repay at least the same amount of cash to the lender at a determinable future date; or

(ii) the borrower receives or will receive a fungible asset and agrees to return an asset of the same kind and of the same or equivalent quantity and quality to the lender at a determinable future date;

(b) a lease;

(c) a transaction undertaken through an exchange regulated in terms of the Financial Markets Act, 2012 (Act 19 of 2012); or

[S 36(1)(c) substituted by s 40 of Act 23 of 2015 with effect from 8 January 2016.]

(d) a transaction in participatory interests in a scheme regulated in terms of the Collective Investment Schemes Control Act, 2002 (Act 45 of 2002).

(2) Subsection (1) applies only to an ‘arrangement’ that—

(a) is undertaken on a stand-alone basis and is not directly or indirectly connected to any other ‘arrangement’ (whether entered into between the same or different parties); or

(b) would have qualified as having been undertaken on a stand-alone basis as required by paragraph (a), were it not for a connected ‘arrangement’ that is entered into for the sole purpose of providing security and if no ‘tax benefit’ is obtained or enhanced by virtue of the security ‘arrangement’.

(3) Subsection (1) does not apply to an ‘arrangement’ that is entered into—

(a) with the main purpose or one of its main purposes of obtaining or enhancing a ‘tax benefit’; or

(b) in a specific manner or form that enhances or will enhance a ‘tax benefit’.

(4) The Commissioner may determine an ‘arrangement’ to be an excluded ‘arrangement’ by public notice.

[S 36(4) substituted by s 42(1) of Act 44 of 2014 with effect from 20 January 2015.]

37. Disclosure obligation

(1) The information referred to in section 38 in respect of a ‘reportable arrangement’ must be disclosed by a person who—

(a) is a ‘participant’ in an ‘arrangement’ on the date on which it qualifies as a ‘reportable arrangement’, within 45 business days after that date; or

(b) becomes a ‘participant’ in an ‘arrangement’ after the date on which it qualifies as a ‘reportable arrangement’, within 45 business days after becoming a ‘participant’.

[S 37(1) substituted by s 43(1)(a) of Act 44 of 2014 with effect from 20 January 2015.]

(2) ...

[S 37(2) repealed by s 43(1)(a) of Act 44 of 2014 with effect from 20 January 2015.]

(3) A ‘participant’ need not disclose the information if the ‘participant’ obtains a written statement from any other ‘participant’ that the other ‘participant’ has disclosed the ‘reportable arrangement’.’

[S 37(3) amended by s 47 of Act 21 of 2012 with effect from 1 October 2012; substituted by s 43(1)(a) of Act 44 of 2014 with effect from 20 January 2015.]

(4) ...

[S 37(4) repealed by s 43(1)(b) of Act 44 of 2014 with effect from 20 January 2015.]

(5) SARS may grant extension for disclosure for a further 45 business days, if reasonable grounds exist for the extension.

38. Information to be submitted

The following information in relation to a ‘reportable arrangement’, must be submitted in the prescribed form and manner and by the date specified—

[S 38, words preceding (a), substituted by s 44(1) of Act 44 of 2014 with effect from 20 January 2015.]

(a) a detailed description of all its steps and key features, including, in the case of an ‘arrangement’ that is a step or part of a larger ‘arrangement’, all the steps and key features of the larger ‘arrangement’;

(b) a detailed description of the assumed ‘tax benefits’ for all ‘participants’, including, but not limited to, tax deductions and deferred income;

(d) a list of all its agreements; and

(e) any financial model that embodies its projected tax treatment.

39. Reportable arrangement reference number

SARS must, after receipt of the information contemplated in section 38, issue a ‘reportable arrangement’ reference number to each ‘participant’ for administrative purposes only.

[S 39 substituted by s 45(1) of Act 44 of 2014 with effect from 20 January 2015.]

CHAPTER 5

INFORMATION GATHERING

Part A

General rules for inspection, verification, audit and criminal investigation

40. Selection for inspection, verification or audit

SARS may select a person for inspection, verification or audit on the basis of any consideration relevant for the proper administration of a tax Act, including on a random or a risk assessment basis.

41. Authorisation for SARS official to conduct audit or criminal investigation

(1) A senior SARS official may grant a SARS official written authorisation to conduct a field audit or criminal investigation, as referred to in Part B.

(2) When a SARS official exercises a power or duty under a tax Act in person, the official must produce the authorisation.

(3) If the official does not produce the authorisation, a member of the public is entitled to assume that the official is not a SARS official so authorised.

42. Keeping taxpayer informed

(1) A SARS official involved in or responsible for an audit under this Chapter must, in the form and in the manner as may be prescribed by the Commissioner by public notice, provide the taxpayer with a notice of commencement of an audit and, thereafter, a report indicating the stage of completion of the audit.

[S 42(1) substituted by s 48(a) of Act 21 of 2012 with effect from 1 October 2012, s 16 of Act 22 of 2018 with effect from 17 January 2019.]

(2) Upon conclusion of the audit or a criminal investigation, and where—

(a) the audit or investigation was inconclusive, SARS must inform the taxpayer accordingly within 21 business days; or

(b) the audit identified potential adjustments of a material nature, SARS must within 21 business days, or the further period that may be required based on the complexities of the audit, provide the taxpayer with a document containing the outcome of the audit, including the grounds for the proposed assessment or decision referred to in section 104(2).

(3) Upon receipt of the document described in subsection (2)(b), the taxpayer must within 21 business days of delivery of the document, or the further period requested by the taxpayer that may be allowed by SARS based on the complexities of the audit, respond in writing to the facts and conclusions set out in the document.

(4) The taxpayer may waive the right to receive the document.

(5) Subsections (1) and (2)(b) do not apply if a senior SARS official has a reasonable belief that compliance with those subsections would impede or prejudice the purpose, progress or outcome of the audit.

(6) SARS may under the circumstances described in subsection (5) issue the assessment or make the decision referred to in section 104(2) resulting from the audit and the grounds of the assessment or decision must be provided to the taxpayer within 21 business days of the assessment or the decision, or the further period that may be required based on the complexities of the audit or the decision.

[S 42(6) substituted by s 48(b) of Act 21 of 2012 with effect from 1 October 2012.]

42A. Procedure where legal professional privilege is asserted

(1) For purposes of Parts B, C and D, if a person alleges the existence of legal professional privilege in respect of relevant material required by SARS, during an inquiry or during the conduct of a search and seizure by SARS, the person must provide the following information to SARS and, if applicable, the presiding officer designated under section 51 or the legal practitioner referred to in section 64—

[S 42A(1), words preceding (a), amended by s 29 of Act 33 of 2019 with effect from 15 January 2020.]

(a) a description and purpose of each item of the material in respect of which the privilege is asserted;

(b) the author of the material and the capacity in which the author was acting;

(d) confirmation in writing that the person referred to in paragraph (c) is claiming privilege in respect of each item of the material;

(e) if the material is not in possession of the person referred to in paragraph (d), from whom did the person asserting privilege obtain the material; and

(f) if the person asserting privilege is not the person referred to in paragraph (d), under what circumstances and instructions regarding the privilege did the person obtain the material.

(2) A person must submit the information required under Part B to SARS at the place, in the format and within the time specified by SARS, unless SARS extends the period based on reasonable grounds submitted by the person.

(3) If SARS disputes the assertion of privilege upon receipt of the information—

(a) SARS must make arrangements with a practitioner from the panel appointed under section 111 to take receipt of the material;

(b) the person asserting privilege must seal and hand over the material in respect of which privilege is asserted to the practitioner;

(c) the practitioner must within 21 business days after being handed the material make a determination of whether the privilege applies and may do so in the manner the practitioner deems fit, including considering representations made by the parties;

(d) if a determination of whether the privilege applies is not made by the practitioner or a party is not satisfied with the determination, the practitioner must retain the relevant material pending final resolution of the dispute by the parties or an order of court; and

(e) any application to a High Court must be instituted within 30 days of the expiry of the period of 21 business days, failing which the material must be handed to the party in whose favour the determination, if any, was made.

(4) The appointed practitioner—

(a) is not regarded as acting on behalf of either party;

(b) must personally take responsibility for the safekeeping of the material;

(d) must be compensated in the same manner as if acting as chairperson of the tax board.

[S 42A inserted by s 41 of Act 23 of 2015 with effect from 8 January 2016.]

43. Referral for criminal investigation

(1) If at any time before or during the course of an audit it appears that a taxpayer may have committed a serious tax offence, the investigation of the offence must be referred to a senior SARS official responsible for criminal investigations for a decision as to whether a criminal investigation should be pursued.

[S 43(1) substituted by s 49 of Act 21 of 2012 with effect from 1 October 2012.]

(2) Relevant material obtained under this Chapter from the taxpayer after the referral, must be kept separate from the criminal investigation.

[S 43(2) substituted by s 49 of Act 21 of 2012 with effect from 1 October 2012.]

(3) If an investigation is referred under subsection (1) the relevant material and files relating to the case must be returned to the SARS official responsible for the audit if—

(a) it is decided not to pursue a criminal investigation;

(b) it is decided to terminate the investigation; or

44. Conduct of criminal investigation

(1) During a criminal investigation, SARS must apply the information gathering powers in terms of this Chapter with due recognition of the taxpayer’s constitutional rights as a suspect in a criminal investigation.

(2) In the event that a decision is taken to pursue the criminal investigation of a serious tax offence, SARS may make use of relevant material obtained prior to the referral referred to in section 43.

(3) Relevant material obtained during a criminal investigation may be used for purposes of audit as well as in subsequent civil and criminal proceedings.

[S 44(3) substituted by s 17 of Act 22 of2018 with effect from 17 January 2019.]

Part B

Inspection, request for relevant material, audit and criminal investigation

45. Inspection

(1) A SARS official may, for the purposes of the administration of a tax Act and without prior notice, arrive at a premises where the SARS official has a reasonable belief that a trade or enterprise is being carried on and conduct an inspection to determine only—

(a) the identity of the person occupying the premises;

(b) whether the person occupying the premises is registered for tax; or

(2) A SARS official may not enter a dwelling-house or domestic premises, except any part thereof used for the purposes of trade, under this section without the consent of the occupant.

46. Request for relevant material

(1) SARS may, for the purposes of the administration of a tax Act in relation to a taxpayer, whether identified by name or otherwise objectively identifiable, require the taxpayer or another person to, within a reasonable period, submit relevant material (whether orally or in writing) that SARS requires.

(2) A senior SARS official may require relevant material in terms of subsection (1)—

(a) in respect of taxpayers in an objectively identifiable class of taxpayers; or

(b) held or kept by a connected person, as referred to in paragraph (d)(i) of the definition of ‘connected person’ in the Income Tax Act, in relation to the taxpayer, located outside the Republic.

[S 46(2) substituted by s 42(a) of Act 23 of 2015 with effect from 8 January 2016.]

(3) A request by SARS for relevant material from a person other than the taxpayer is limited to material maintained or kept or that should reasonably be maintained or kept by the person in relation to the taxpayer.

[S 46(3) substituted by s 50(a) of Act 21 of 2012 with effect from 1 October 2012, s 42(a) of Act 23 of 2015 with effect from 8 January 2016; amended by s 30 of Act 33 of 2019 with effect from 15 January 2020.]

(4) A person or taxpayer receiving from SARS a request for relevant material under this section must submit the relevant material to SARS at the place, in the format (which must be reasonably accessible to the person or taxpayer) and—

(a) within the time specified in the request; or

(b) if the material is held by a connected person referred to in subsection (2)(b), within 90 days from the date of the request, which request must set out the consequences referred to in subsection (9) of failing to do so.

[S 46(4) substituted by s 46 of Act 44 of 2014 with effect from 1 October 2012, s 42(a) of Act 23 of 2015 with effect from 8 January 2016.]

(5) If reasonable grounds for an extension are submitted by the person or taxpayer, SARS may extend the period within which the relevant material must be submitted.

[S 46(5) substituted by s 50(b) of Act 21 of 2012 with effect from 1 October 2012, s 42(a) of Act 23 of 2015 with effect from 8 January 2016.]

(6) Relevant material required by SARS under this section must be referred to in the request with reasonable specificity.

(7) A senior SARS official may direct that relevant material—

(a) be provided under oath or solemn declaration; or

(b) if required for purposes of a criminal investigation, be provided under oath or solemn declaration and, if necessary, in accordance with the requirements of section 212 or 236 of the Criminal Procedure Act, 1977 (Act 51 of 1977).

[S 46(7) substituted by s 38 of Act 39 of 2013 with effect from 1 October 2012.]

(8) A senior SARS official may request relevant material that a person has available for purposes of revenue estimation.

(9) If a taxpayer fails to provide material referred to in subsection (2)(b), the material may not be produced by the taxpayer in any subsequent proceedings, unless a competent court directs otherwise on the basis of circumstances outside the control of the taxpayer and any connected person referred to in paragraph (d)(i) of the definition of ‘connected person’ in the Income Tax Act, in relation to the taxpayer.

[S 46(9) inserted by s 42(b) of Act 23 of 2015 with effect from 8 January 2016.]

47. Production of relevant material in person

(1) A senior SARS official may, by notice, require a person, whether or not chargeable to tax, an employee of the person or a person who holds an office in the person to attend in person at the time and place designated in the notice for the purpose of being interviewed by a SARS official concerning the tax affairs of the person, if the interview—

(a) is intended to clarify issues of concern to SARS—

(i) to render further verification or audit unnecessary; or

(ii) to expedite a current verification or audit; and

(b) is not for purposes of a criminal investigation.

[S 47(1) substituted by s 43 of Act 23 of 2015 with effect from 8 January 2016.]

(2) The senior SARS official issuing the notice may require the person interviewed to produce relevant material under the control of the person during the interview.

(3) Relevant material required by SARS under subsection (2) must be referred to in the notice with reasonable specificity.

(4) A person may decline to attend an interview, if the distance between the place designated in the notice and the usual place of business or residence of the person exceeds the distance prescribed by the Commissioner by public notice.

48. Field audit or criminal investigation

(1) A SARS official named in an authorisation referred to in section 41 may require a person, with prior notice of at least 10 business days, to make available at the person’s premises specified in the notice relevant material that the official may require to audit or criminally investigate in connection with the administration of a tax Act in relation to the person or another person.

(2) The notice referred to in subsection (1) must—

(a) state the place where and the date and time that the audit or investigation is due to start (which must be during normal business hours); and

(b) indicate the initial basis and scope of the audit or investigation.

(3) SARS is not required to give the notice if the person waives the right to receive the notice.

(4) If a person at least five business days before the date listed in the notice advances reasonable grounds for varying the notice, SARS may vary the notice accordingly, subject to conditions SARS may impose with regard to preparatory measures for the audit or investigation.

(5) A SARS official may not enter a dwelling-house or domestic premises, except any part thereof used for the purposes of trade, under this section without the consent of the occupant.

49. Assistance during field audit or criminal investigation

(1) The person on whose premises an audit or criminal investigation is carried out and any other person on the premises, must provide such reasonable assistance as is required by SARS to conduct the audit or investigation, including—

[S 49(1), words preceding (a), substituted by s 51(a) of Act 21 of 2012 with effect from 1 October 2012.]

(a) making available appropriate facilities, to the extent that such facilities are available;

(b) answering questions relating to the audit or investigation including, if so required, in the manner referred to in section 46(7); and

[S 49(1)(b) substituted by s 44 of Act 23 of 2015 with effect from 8 January 2016.]

(2) No person may without just cause—

(a) obstruct a SARS official from carrying out the audit or investigation; or

(b) refuse to give the access or assistance as may be required under subsection (1).

(3) The person may recover from SARS after completion of the audit or criminal investigation (or, at the person’s request, on a monthly basis) the cost for the use of photocopying facilities in accordance with the fees prescribed in section 92(1)(b) of the Promotion of Access to Information Act.

[S 49(3) substituted by s 51(b) of Act 21 of 2012 with effect from 1 October 2012.]

Part C

Inquiries

50. Authorisation for inquiry

(1) A judge may, on application made ex parte and authorised by a senior SARS official grant an order in terms of which a person described in section 51(3) is designated to act as presiding officer at the inquiry referred to in this section.

[S 50(1) substituted by s 47 of Act 44 of 2014 with effect from 1 October 2012.]

(2) An application under subsection (1) must be supported by information supplied under oath or solemn declaration, establishing the facts on which the application is based.

(3) A senior SARS official may authorise a person to conduct an inquiry for the purposes of the administration of a tax Act.

51. Inquiry order

(1) A judge may grant the order referred to in section 50(1) if satisfied that there are reasonable grounds to believe that—

(a) a person has—

(i) failed to comply with an obligation imposed under a tax Act;

(ii) committed a tax offence; or

(iii) disposed of, removed or concealed assets which may fully or partly satisfy an outstanding tax debt; and

(b) relevant material is likely to be revealed during the inquiry which may provide proof of the failure to comply, of the commission of the offence or of the disposal, removal or concealment of the assets.

[S 51(1) substituted by s 45 of Act 23 of 2015 with effect from 8 January 2016.]

(2) The order referred to in subsection (1) must—

(a) designate a presiding officer before whom the inquiry is to be held;

(b) identify the person referred to in subsection (1)(a);

(c) refer to the alleged non-compliance, the commission of the offence or the disposal, removal or concealment of assets to be inquired into;

(d) be reasonably specific as to the ambit of the inquiry; and

(e) be provided to the presiding officer.

[S 51(2) substituted by s 45 of Act 23 of 2015 with effect from 8 January 2016.]

(3) A presiding officer must be a person appointed to the panel described in section 111.

52. Inquiry proceedings

(1) The presiding officer determines the conduct of the inquiry as the presiding officer thinks fit.

(2) The presiding officer must ensure that the recording of the proceedings and evidence at the inquiry is of a standard that would meet the standard required for the proceedings and evidence to be used in a court of law.

(3) A person has the right to have a representative present when that person appears as a witness before the presiding officer.

53. Notice to appear

(1) The presiding officer may, by notice in writing, require a person, whether or not chargeable to tax, to—

(a) appear before the inquiry, at the time and place designated in the notice, for the purpose of being examined under oath or solemn declaration, and

(b) produce any relevant material in the custody of the person.

(2) If the notice requires the production of relevant material, it is sufficient if the relevant material is referred to in the notice with reasonable specificity.

54. Powers of presiding officer

The presiding officer has the same powers regarding witnesses at the inquiry as are vested in a president of the tax court under sections 127 and 128.

[S 54 substituted by s 39 of Act 39 of 2013 with effect from 1 October 2012.]

55. Witness fees

The presiding officer may direct that a person receive witness fees to attend an inquiry in accordance with the tariffs prescribed in terms of section 51bis of the Magistrates’ Courts Act, 1944 (Act 32 of 1944).

56. Confidentiality of proceedings

(1) An inquiry under this Part is private and confidential.

(2) The presiding officer may, on request, exclude a person from the inquiry if the person’s attendance is prejudicial to the inquiry.

(3) Section 69 applies with the necessary changes to persons present at the questioning of a person, including the person being questioned.

(4) Subject to section 57(2), SARS may use evidence given by a person under oath or solemn declaration at an inquiry in a subsequent proceeding involving the person or another person.

57. Incriminating evidence

(1) A person may not refuse to answer a question during an inquiry on the grounds that it may incriminate the person.

(2) Incriminating evidence obtained under this section is not admissible in criminal proceedings against the person giving the evidence, unless the proceedings relate to—

(a) the administering or taking of an oath or the administering or making of a solemn declaration;

(b) the giving of false evidence or the making of a false statement; or

58. Inquiry not suspended by civil or criminal proceedings

Unless a court orders otherwise, an inquiry relating to a person referred to in section 51(1)(a) must proceed despite the fact that a civil or criminal proceeding is pending or contemplated against or involves the person, a witness or potential witness in the inquiry, or another person whose affairs may be investigated in the course of the inquiry.

Part D

Search and seizure

59. Application for warrant

(1) A senior SARS official may, if necessary or relevant to administer a tax Act, authorise an application for a warrant under which SARS may enter a premises where relevant material is kept to search the premises and any person present on the premises and seize relevant material.

(2) SARS must apply ex parte to a judge for the warrant, which application must be supported by information supplied under oath or solemn declaration, establishing the facts on which the application is based.

(3) Despite subsection (2), SARS may apply for the warrant referred to in subsection (1) and in the manner referred to in subsection (2), to a magistrate, if the matter relates to an audit or investigation where the estimated tax in dispute does not exceed the amount determined in the notice issued under section 109(1)(a).

60. Issuance of warrant

(1) A judge or magistrate may issue the warrant referred to in section 59(1) if satisfied that there are reasonable grounds to believe that—

(a) a person failed to comply with an obligation imposed under a tax Act, or committed a tax offence; and

(b) relevant material likely to be found on the premises specified in the application may provide evidence of the failure to comply or commission of the offence.

(2) A warrant issued under subsection (1) must contain the following—

(a) the alleged failure to comply or offence that is the basis for the application;

(b) the person alleged to have failed to comply or to have committed the offence;

(d) the fact that relevant material as defined in section 1 is likely to be found on the premises.

(3) The warrant must be exercised within 45 business days or such further period as a judge or magistrate deems appropriate on good cause shown.

61. Carrying out search

(1) A SARS official exercising a power under a warrant referred to in section 60 must produce the warrant, and if the owner or person in control of the premises is not present, the SARS official must affix a copy of the warrant to the premises in a prominent and visible place.

[S 61(1) substituted by s 52 of Act 21 of 2012 with effect from 1 October 2012.]

(2) Subject to section 63, a SARS official’s failure to produce a warrant entitles a person to refuse access to the official.

(3) The SARS official may—

(a) open or cause to be opened or removed in conducting a search, anything which the official suspects to contain relevant material;

(b) seize any relevant material;

(c) seize and retain a computer or storage device in which relevant material is stored for as long as it is necessary to copy the material required;

(d) make extracts from or copies of relevant material, and require from a person an explanation of relevant material; and

(e) if the premises listed in the warrant is a vessel, aircraft or vehicle, stop and board the vessel, aircraft or vehicle, search the vessel, aircraft or vehicle or a person found in the vessel, aircraft or vehicle, and question the person with respect to a matter dealt with in a tax Act.

(4) The SARS official must make an inventory of the relevant material seized in the form, manner and at the time that is reasonable under the circumstances and provide a copy thereof to the person.

(5) The SARS official must conduct the search with strict regard for decency and order, and may search a person if the official is of the same gender as the person being searched.

(6) The SARS official may, at any time, request such assistance from a police officer as the official may consider reasonably necessary and the police officer must render the assistance.

(7) No person may obstruct a SARS official or a police officer from executing the warrant or without reasonable excuse refuse to give such assistance as may be reasonably required for the execution of the warrant.

(8) If the SARS official seizes relevant material, the official must ensure that the relevant material seized is preserved and retained until it is no longer required for—

(a) the investigation into the non-compliance or the offence described under section 60(1)(a); or

(b) the conclusion of any legal proceedings under a tax Act or criminal proceedings in which it is required to be used.

62. Search of premises not identified in warrant

(1) If a senior SARS official has reasonable grounds to believe that—

(a) the relevant material referred to in section 60(1)(b) and included in a warrant is at premises not identified in the warrant and may be removed or destroyed;

(b) a warrant cannot be obtained in time to prevent the removal or destruction of the relevant material; and

a SARS official may enter and search the premises and exercise the powers granted in terms of this Part, as if the premises had been identified in the warrant.

(2) A SARS official may not enter a dwelling-house or domestic premises, except any part thereof used for purposes of trade, under this section without the consent of the occupant.

63. Search without warrant

(1) A senior SARS official may without a warrant exercise the powers referred to in section 61(3)—

(a) if the owner or person in control of the premises so consents in writing; or

(b) if the senior SARS official on reasonable grounds is satisfied that—

(i) there may be an imminent removal or destruction of relevant material likely to be found on the premises;

(ii) if SARS applies for a search warrant under section 59, a search warrant will be issued; and

(iii) the delay in obtaining a warrant would defeat the object of the search and seizure.

(2) A SARS official must, before carrying out the search, inform the owner or person in control of the premises—

(a) that the search is being conducted under this section; and

(b) of the alleged failure to comply with an obligation imposed under a tax Act or tax offence that is the basis for the search.

(3) Section 61(4) to (8) applies to a search conducted under this section.

(4) A SARS official may not enter a dwelling-house or domestic premises, except any part thereof used for purposes of trade, under this section without the consent of the occupant.

(5) If the owner or person in control of the premises is not present, the SARS official must inform such person of the circumstances referred to in subsection (2) as soon as reasonably possible after the execution of the search and seizure.

[S 63(5) inserted by s 53 of Act 21 of 2012 with effect from 1 October 2012.]

64. Legal professional privilege

(1) If SARS foresees the need to search and seize relevant material that may be alleged to be subject to legal professional privilege, SARS must arrange for a legal practitioner from the panel appointed under section 111 to be present during the execution of the warrant.

(2) A legal practitioner with whom SARS has made an arrangement in terms of subsection (1) may appoint a substitute legal practitioner to be present on the appointing legal practitioner’s behalf during the execution of a warrant.

(3) If, during the carrying out of a search and seizure by SARS, a person alleges the existence of legal professional privilege in respect of relevant material and a legal practitioner is not present under subsection (1) or (2), SARS must seal the material, make arrangements with a legal practitioner from the panel appointed under section 111 to take receipt of the material and, as soon as is reasonably possible, hand over the material to the legal practitioner.

(4) A legal practitioner referred to in subsections (1), (2) and (3)—

(a) is not regarded as acting on behalf of either party; and

(b) must personally take responsibility—

(i) in the case of a warrant issued under section 60, for the removal from the premises of relevant material in respect of which legal privilege is alleged;

(ii) in the case of a search and seizure carried out under section 63, for the receipt of the sealed information; and

(iii) if a substitute legal practitioner in terms of subsection (2), for the delivery of the information to the appointing legal practitioner for purposes of making the determination referred to in subsection (5).

(5) The legal practitioner referred to in subsection (1) or (3) must, within 21 business days, make a determination of whether the privilege applies and may do so in the manner the legal practitioner deems fit, including considering representations made by the parties.

(6) If a determination of whether the privilege applies is not made under subsection (5) or a party is not satisfied with the determination, the legal practitioner must retain the relevant material pending final resolution of the dispute by the parties or an order of court.

(7) The legal practitioner from the panel appointed under section 111 and any legal practitioner acting on behalf of that legal practitioner referred to in subsection (1) must be compensated in the same manner as if acting as Chairperson of the tax board.

[S 64 amended by s 31 of Act 33 of 2019 with effect from 15 January 2020.]

65. Person’s right to examine and make copies

(1) The person to whose affairs relevant material seized relates, may examine and copy it.

(2) Examination and copying must be made—

(a) at the person’s cost in accordance with the fees prescribed in accordance with section 92(1)(b) of the Promotion of Access to Information Act;

(b) during normal business hours; and

66. Application for return of seized relevant material or costs of damages

(1) A person may request SARS to—

(a) return some or all of the seized material; and

(b) pay the costs of physical damage caused during the conduct of a search and seizure.

(2) If SARS refuses the request, the person may apply to a High Court for the return of the seized material or payment of compensation for physical damage caused during the conduct of the search and seizure.

(3) The court may, on good cause shown, make the order as it deems fit.

(4) If the court sets aside the warrant issued in terms of section 60(1) or orders the return of the seized material, the court may nevertheless authorise SARS to retain the original or a copy of any relevant material in the interests of justice.

CHAPTER 6

CONFIDENTIALITY OF INFORMATION

67. General prohibition of disclosure

(1) This Chapter applies to—

(a) SARS confidential information as referred to in section 68(1); and

(b) taxpayer information, which means any information provided by a taxpayer or obtained by SARS in respect of the taxpayer, including biometric information.

(2) An oath or solemn declaration undertaking to comply with the requirements of this Chapter in the prescribed form, must be taken before a magistrate, justice of the peace or commissioner of oaths by—

(a) a SARS official and the Tax Ombud, before commencing duties or exercising any powers under a tax Act; and

(b) a person referred to in section 70 who performs any function referred to in that section, before the disclosure described in that section may be made.

(3) In the event of the disclosure of SARS confidential information or taxpayer information contrary to this Chapter, the person to whom it was so disclosed may not in in any manner disclose, publish or make it known to any other person who is not a SARS official.

(4) A person who receives information under section 68, 69, 70 or 71, must preserve the secrecy of the information and may only disclose the information to another person if the disclosure is necessary to perform the functions specified in those sections.

(5) The Commissioner may, for purposes of protecting the integrity and reputation of SARS as an organisation and after giving the taxpayer at least 24 hours’ notice, disclose taxpayer information to the extent necessary to counter or rebut false allegations or information disclosed by the taxpayer, the taxpayer’s duly authorised representative or other person acting under the instructions of the taxpayer and published in the media or in any other manner.

68. SARS confidential information and disclosure

(1) SARS confidential information means information relevant to the administration of a tax Act that is—

(a) personal information about a current or former SARS official, whether deceased or not;

(b) information subject to legal professional privilege vested in SARS;

(c) information that was supplied in confidence by a third party to SARS the disclosure of which could reasonably be expected to prejudice the future supply of similar information, or information from the same source;

(d) information related to investigations and prosecutions described in section 39 of the Promotion of Access to Information Act;

(e) information related to the operations of SARS, including an opinion, advice, report, recommendation or an account of a consultation, discussion or deliberation that has occurred, if—

(i) the information was given, obtained or prepared by or for SARS for the purpose of assisting to formulate a policy or take a decision in the exercise of a power or performance of a duty conferred or imposed by law; and

(ii) the disclosure of the information could reasonably be expected to frustrate the deliberative process in SARS or between SARS and other organs of state by—

(aa) inhibiting the candid communication of an opinion, advice, report or recommendation or conduct of a consultation, discussion or deliberation; or

(bb) frustrating the success of a policy or contemplated policy by the premature disclosure thereof;

(f) information about research being or to be carried out by or on behalf of SARS, the disclosure of which would be likely to prejudice the outcome of the research;

(g) information, the disclosure of which could reasonably be expected to prejudice the economic interests or financial welfare of the Republic or the ability of the government to manage the economy of the Republic effectively in the best interests of the Republic, including a contemplated change or decision to change a tax or a duty, levy, penalty, interest and similar moneys imposed under a tax Act or the Customs and Excise Act;

Uncommenced amendment

[S 68(1)(g) substituted by s 46(1) of Act 23 of 2015 with effect immediately after the commencement of the Customs Control Act 31 of 2014.]

(h) information supplied in confidence by or on behalf of another state or an international organisation to SARS;

(i) a computer program, as defined in section 1(1) of the Copyright Act, 1978 (Act 98 of 1978), owned by SARS;

[S 68(1)(i) amended by s 40(a) of Act 39 of 2013 with effect from 1 October 2012.]

(j) information relating to the security of SARS buildings, property, structures or systems; and

[S 68(1)(j) amended by s 40(b) of Act 39 of 2013 with effect from 1 October 2012.]

(k) information relating to the verification or audit selection procedure or method used by SARS, the disclosure of which could reasonably be expected to jeopardise the effectiveness thereof.

[S 68(1)(k) inserted by s 40(c) of Act 39 of 2013 with effect from 1 October 2012.]

(2) A person who is a current or former SARS official—

(a) may not disclose SARS confidential information to a person who is not a SARS official;

(b) may not disclose SARS confidential information to a SARS official who is not authorised to have access to the information; and

(c) must take the precautions that may be required by the Commissioner to prevent a person referred to in paragraph (a) or (b) from obtaining access to the information.

(3) A person who is a SARS official or former SARS official may disclose SARS confidential information if—

(a) the information is public information;

(b) authorised by the Commissioner;

(c) disclosure is authorised under any other Act which expressly provides for the disclosure of the information despite the provisions in this Chapter;

(d) access has been granted for the disclosure of the information in terms of the Promotion of Access to Information Act; or

(e) required by order of a High Court.

69. Secrecy of taxpayer information and general disclosure

(1) A person who is a current or former SARS official must preserve the secrecy of taxpayer information and may not disclose taxpayer information to a person who is not a SARS official.

(2) Subsection (1) does not prohibit the disclosure of taxpayer information by a person who is a current or former SARS official—

(a) in the course of performance of duties under a tax Act or customs and excise legislation, such as—

[S 69(2)(a), words preceding (i), substituted by s 47 of Act 23 of 2015 with effect from 8 January 2016.]

(i) to the South African Police Service or the National Prosecuting Authority, if the information relates to, and constitutes material information for the proving of, a tax offence;

(ii) as a witness in civil or criminal proceedings under a tax Act; or

(iii) the taxpayer information necessary to enable a person to provide such information as may be required by SARS from that person;

(b) under any other Act which expressly provides for the disclosure of the information despite the provisions in this Chapter;

(d) if the information is public information.

(3) An application to the High Court for the order referred to in subsection (2)(c) requires prior notice to SARS of at least 15 business days unless the court, based on urgency, allows a shorter period.

(4) SARS may oppose the application on the basis that the disclosure may seriously prejudice the taxpayer concerned or impair a civil or criminal tax investigation by SARS.

(5) The court may not grant the order unless satisfied that the following circumstances apply—

(a) the information cannot be obtained elsewhere;

(b) the primary mechanisms for procuring evidence under an Act or rule of court will yield or yielded no or disappointing results;

(d) the information does not constitute biometric information.

(6) Subsection (1) does not prohibit the disclosure of information—

(a) to the taxpayer; or

(b) with the written consent of the taxpayer, to another person.

(7) Biometric information of a taxpayer may not be disclosed by SARS except under the circumstances described in subsection (2)(a)(i).

(8) The Commissioner may, despite the provisions of this section, disclose—

(a) the name and taxpayer reference number of a taxpayer;

(b) a list of—

(i) pension funds, pension preservation funds, provident funds, provident preservation funds and retirement annuity funds as defined in section 1(1) of the Income Tax Act; and

(ii) organisations approved under sections 18A and 30 of the Income Tax Act and the type of approval;

[S 69(8)(b)(ii) substituted by s 26 of Act 18 of 2023 with effect from 22 December 2023.]

[S 69(8)(b) substituted by s 53 of Act 16 of 2016 with effect from 19 January 2017.]

(d) taxpayer information in an anonymised form.

[S 69(8) amended by s 41 of Act 39 of 2013 with effect from 1 October 2012; substituted by s 48 of Act 44 of 2014 with effect from 1 October 2012.]

70. Disclosure to other entities

(1) A senior SARS official may provide to the Director-General of the National Treasury taxpayer information or SARS confidential information in respect of—

(a) a taxpayer which is an—

(i) institution referred to in section 3(1) of the Public Finance Management Act, 1999 (Act 1 of 1999); or

(ii) entity referred to in section 3 of the Local Government: Municipal Finance Management Act, 2003 (Act 56 of 2003), to the extent necessary for the Director-General to perform the functions and exercise the powers of the National Treasury under those Acts; and

(b) a class of taxpayers to the extent necessary for the purposes of tax policy design or revenue estimation.

(2) A senior SARS official may disclose to—

(a) the Statistician-General the taxpayer information as may be required for the purpose of carrying out the Statistician-General’s duties to publish statistics in an anonymous form;

(b) the Chairperson of the Board administering the National Student Financial Aid Scheme, the name and address of the employer of a person to whom a loan or bursary has been granted under that scheme, for use in performing the Chairperson’s functions under the National Student Financial Aid Scheme Act, 1999 (Act 56 of 1999);