So now you submitted your tax return on time, and to the best of your knowledge and ability. Now SARS has issued an assessment and you are not in agreement with this assessment. What are your options?
Your first port of call is to review your income tax submission to determine what gave rise to the difference between what you expected your assessment to be and what SARS has assessed you as. If you spot an error or omission on your tax return or believe that SARS has captured your information incorrectly, you will need to request a correction and re-submit your tax return. The Request for Correction process allows you the ability to correct a previously submitted return/declaration for Income Tax.
Tips for requesting a correction:
- You will only be allowed to adjust the last version of each declaration, therefore ensure the correct version is always adjusted.
- Make sure you submit a complete revised return/declaration, and not just the differences.
- Make sure you have or take (if doing this as a branch) along all relevant material (supporting documents)
- If the Request Correction button isn’t available (e.g. greyed out), this means that you’re not able to submit a request. You will need to lodge an objection.
- A request for correction will not be available under the
A request for correction will not be available in the following circumstances where:
- There is an ongoing audit
- The one RFC which is allowed was sent or
- The relevant material (supporting documents) has already been sent
- An audit case was completed or a revised declaration was done by a SARS user
Second step (Notice of Objection):
If you have checked your return and believe that it has been captured correctly, but you don’t agree with the outcome of the audit/verification, you can dispute the outcome, you must submit an objection.
It is important for a taxpayer to understand that they have a right to understand how SARS reached a given assessment. This is specifically important because a taxpayer has the burden of proof in terms of Section 102 of the Tax Administration Act. To this end, a taxpayer can request for a reason of the basis on which the assessment was done. This can be done within 30 business days of the date of assessment.
The taxpayer can lodge an objection within 30 business days of the date of assessment, or if grounds of assessment were requested from SARS, within 30 business days of delivery of the reasons. The correct prescribed form should be used for these processes. The objection must also comply with the provision of the Tax Administration Act. It is also important to be clear about the grounds on which the objection is based. Apart from that, supporting documents should also accompany the taxpayer’s objection substantiating the deductions being disputed. Without supporting documents, SARS may not accept the objection. A taxpayer then have 30 business days to deliver the supporting documentation, with a further 20 business days available on request.
Third step (Appeal):
SARS may allow fully or in part a taxpayer’s objection or may disallow it in full. Where this happens, a taxpayer is entitled to appeal any aspect of the objection that has been disallowed. The correct prescribed form should be used for this purpose. For personal and corporate income tax, this is the Notice of Appeal (NOA) form, which must be lodged within 30 business days of delivery of the notice of disallowance. It is important to note that this process cannot be used to raise new objections. Where applicable a taxpayer may be required to use the, to the matter under dispute, a taxpayer will be required to indicate whether they wish to utilise the ADR procedure. If not, the appeal may be heard before the Tax Board if the tax in dispute does not exceed R500 000 and if both SARS and you agree. Otherwise, the appeal must be heard in the Tax Court.
ADR – Alternative Dispute resolution:
The ADR process was introduced to achieve resolution more cost-effectively and more quickly than formal hearings before the Tax Board or Tax Court. This process can take place via telephone or conference calling. Both taxpayer and SARS are able to reserve the taxpayer’s respective rights, and any representations made, or documents submitted, during ADR are submitted without prejudice.
We hope this was helpful.