How To Get A Third Party Appointment From The Safarsova Tax Authority

Transcription

1 2013 HELPFUL TIPS TO UNDERSTANDING THIRD PARTY APPOINTMENTS 1 HELPFUL TIPS TO UNDERSTANDING THIRD PARTY APPOINTMENTS

2 INTRODUCTION The Tax Administration Act empowers the Commissioner for the South African Revenue Service (SARS) to appoint a third party to withhold and pay over to SARS any amounts due by a taxpayer in terms of the relevant tax Act. Such a third party may be any person who has the management, custody or control of any income, monies or property of the taxpayer. The following notice(s) may be issued by SARS, when appointing a third party: A Third Party Appointment (AA88) Notice will be issued for outstanding administrative debt, for example, the administrative non-compliance penalties. A Notice of Third Party Appointment will be issued for all other outstanding tax debt, including the understatement penalty. SARS will usually use this power only after a taxpayer either has not - Responded to numerous penalty notices, outstanding debt notices and various reminders Disputed the debt (RFR/NOO/ADR1/NOA/ADR2) Attempted to resolve his/her tax affairs Contacted SARS to make appropriate deferment arrangements. The taxpayer s duty is to remedy the applicable non-compliance by submitting all outstanding returns/declarations and/or pay the amount as soon as possible. Taxpayers will continue to face penalties for as long as any return and/or payment remain outstanding. These penalties are imposed every month that a return and/or payment is outstanding as the imposition of penalties will not end on receipt of a payment, but only upon the non-compliance itself being remedied. There may be valid reasons why the legal obligation to submit a complete and accurate return/declaration and/or to make the required payment has not been met, in which case a dispute resolution process is available whereby the imposition of these penalties may be disputed. Ensure that you submit sufficient information to SARS as to why the penalty should not have been imposed. If the information provided shows that you had valid reasons for not submitting a complete and accurate return/declaration and/or making the required payment by the due date, SARS may waive the penalties imposed or a portion thereof. To lodge a dispute you are required to complete and submit the correct form to SARS. Please Note: An objection and/or appeal may be rejected if not submitted on the correct form. The various forms are applicable as follows: Request for Remission (RFR) is applicable to: Personal Income Tax (PIT) (administrative penalties only) Pay-As-You-Earn (PAYE) (administrative penalties only). Notice of Objection (NOO) may only be completed once the RFR has been submitted to SARS and the outcome was either partially allowed or disallowed, only for administrative penalties. The NOO is applicable to: PIT (assessed tax including understatement and administrative penalties) Corporate Income Tax (CIT) (assessed tax including understatement penalties only) PAYE (administrative only). 2 HELPFUL TIPS TO UNDERSTANDING THIRD PARTY APPOINTMENTS

3 ADR1 Notice of Objection for Trusts and Other Taxes is applicable to: Value-Added Tax (VAT) PAYE assessments Income Tax for Trusts Secondary Tax on Companies (STC) Other taxes such as Estate Duty, Donations Tax, etc. Notice of Appeal (NOA) may only be completed and submitted to SARS once the NOO outcome has been received and has either been disallowed or partially allowed. The NOA is applicable to: PIT (assessed tax including understatement and administrative penalties) CIT (assessed tax including understatement penalties only) PAYE (administrative penalties only). ADR2 Notice of Appeal for Trusts and Other Taxes may only be submitted to SARS once the ADR1 outcome has been received and has either been disallowed or partially allowed. The ADR2 is applicable to: VAT PAYE assessments Income Tax for Trusts STC Other taxes such as Estate Duty, Donations Tax, etc. Please Note: The RFR, NOO and NOA may be obtained on SARS efiling by calling the SARS Contact Centre on SARS (7277) or at your nearest SARS branch. The ADR1 and ADR2 are available for download on the SARS website or by calling the SARS Contact Centre. Important: There are serious consequences for a third party who does not adhere to the notice issued by SARS. There is a legal duty for the third party to comply with the appointment. It is a criminal offence for third parties not to adhere to the notice received and they may be held personally liable for the outstanding amounts due. 3 HELPFUL TIPS TO UNDERSTANDING THIRD PARTY APPOINTMENTS

4 FREQUENTLY ASKED QUESTIONS SCENARIO WHAT THE PROCEDURE STATES WHAT SHOULD THE TAXPAYER DO? WHAT WILL SARS DO? I am not liable and should not have received a third party appointment. A taxpayer is entitled to register a dispute using the standard dispute process. Register a dispute using the standard dispute process. For assistance with completing the forms visit the SARS website call the SARS Contact Centre on SARS (7277) or visit the nearest SARS branch. As soon as the dispute has been captured, active third I have disputed the penalty, therefore, how can SARS appoint a third party? SARS will not issue a third party appointment if the penalty is under dispute. Provide SARS with the dispute case number as evidence that the case is under dispute. Call the SARS Contact Centre on SARS (7277) and quote the dispute case number or visit a SARS branch with the relevant material, e.g. copies of the dispute forms, dispute case number, etc. matter. If proven that a dispute case exists, the details will be updated and active third If the dispute has not been allowed (disallowed/partially allowed), the third party appointment will be re-issued to the agent. I have already remedied my non-compliance and/or made payment(s). SARS will only issue a against valid non tax compliance (returns/ submissions and/or payments). Banks will not be able to assist taxpayers in this matter. Provide SARS with details concerning the remedy of the non-compliance and/ or payment(s) submitted. Visits your nearest SARS branch with copies of your completed returns/ declarations, which have been submitted and/or your proof of payment. matter. If proven non-compliance has been remedied and/ or payment(s) have been received, active third party appointments may be Note: The penalty account will be corrected by reversing the respective charges, if applicable. I did not receive any penalty notices, outstanding debt notices or various reminders so how can a be made? SARS will only issue a once a taxpayer has been notified of his/her outstanding debt. Submit evidence reflecting your correct postal address, for the three months prior to the date of issue for the, such as municipal accounts, etc. SARS will investigate the matter, and where sufficient evidence has been submitted, active third 4 HELPFUL TIPS TO UNDERSTANDING THIRD PARTY APPOINTMENTS

5 I have paid my debt so how can SARS raise a third party appointment? Payments made on an incorrect payment reference number (PRN) cannot be allocated to the correct account. Provide the payment receipt to enable SARS to trace the payment. The non-compliance must be remedied to prevent the penalty recurring. matter and re-allocate the payment to the correct account (if applicable). Visits your nearest SARS branch with your proof of payment. Can I offset a valid refund against my outstanding debt? A valid refund may be offset against the outstanding debt if there are no: Outstanding requirements Audits in progress Journals outstanding to be processed. You are required to visit the nearest SARS branch to make such a request. If an offset is approved and the debt is paid in full, an updated third party appointment will be issued, confirming cancellation to the appointed agent. What happens if the third party pays the outstanding debt, and I made a payment as well? The overpayment will be refunded to the taxpayer. Make sure that your banking details provided to SARS are correct. If no other validation exceptions exist, a refund will paid into your bank account. The refund will be paid to the taxpayer s banking details recorded on the SARS system, provided there are no other outstanding requirements. Please note: The FAQs are to assist taxpayers but outcomes may vary from taxpayer to taxpayer as the merits of each case will be determine by SARS. For more information or further assistance visit the SARS website call the SARS Contact Centre on SARS (7277), or visit the nearest SARS branch. Remember to have your reference number on hand. Disclaimer What is contained in this leaflet is intended as a guide only and is not considered to be a legal reference nor is it a binding ruling. The information does not take the place of legislation and readers who are in doubt regarding any aspect of the information displayed in the leaflet should refer to the relevant legislation, or seek a formal opinion from a suitably qualified individual. For more information about the contents of this publication you may Visit the SARS website at Visit your nearest SARS branch If calling from within South Africa, contact the SARS Contact Centre on SARS (7277) If calling from outside South Africa, contact the SARS Contact Centre on (only between 8am and 4pm South African time). August HELPFUL TIPS TO UNDERSTANDING THIRD PARTY APPOINTMENTS