If you find yourself with outstanding tax debt, it is important to know your legal rights as a taxpayer and the steps available to you to suspend or defer the payment of tax debt owed.
Here’s what you need to know about these options available to you:
To prevent SARS from taking any of the aforementioned collection steps, it is imperative that a tax specialist be engaged to prepare a Request for Suspension of Payment.
What is a request for suspension of payment?
The request for suspension of payment is a written request in terms of the Tax Administration Act, 28 of 2011 (“the TAA”), whereby a taxpayer requests that a payment be suspended pending the lodging of a dispute.
Effect of the suspension of payment
The effect of the suspension of payment is that the taxpayer’s debt is automatically suspended, from the date that the request for suspension of payment is submitted to SARS, up and until 10 business days after SARS informed the taxpayer of its decision.
A senior SARS official will consider the request for a suspension of payment and will take various elements into account to assist the official in reaching a decision.
It is of the utmost importance that these elements are dealt with comprehensively and motivated meticulously in the taxpayer’s request for suspension of payment to ensure that the request is granted by a senior SARS official.
Take away
Considering the strain that the economy is currently under as a result of the lockdown regulations imposed, the possibility arises that SARS will now more than ever be desperate to collect outstanding taxes from taxpayers. Where a request for a suspension of payment falls short of addressing the required elements, SARS may be inclined to reject a request for suspension of payment and the taxpayer faces the risk that SARS may commence with collection proceedings.
Tax Consulting SA has a team of highly qualified tax attorneys who will be able to assist you in drafting a compelling and well-motivated request for suspension of payment, giving you the best opportunity to suspend that immediate tax liability. Any personal information shared with our tax attorneys will be protected by legal privilege.
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The Compromise of Tax Debt application (“the Compromise”) is aimed at aiding taxpayers to reduce their tax liability by means of a Compromise Agreement (“the Agreement”), which is entered into with SARS.
Where SARS is approached correctly, a tax debt can be reduced, and the balance paid off in terms of the Compromise.
The effect of entering into a Compromise greatly reduces the tax liability to an affordable amount, while granting a much-needed reprieve, and so aids taxpayers on the road to financial recovery.
Once the Compromise is accepted by SARS, and the agreement duly executed, with payment being made as proposed by the taxpayer, the balance of the liability due to SARS is written-off by the revenue authority.
As evidenced in recent months, and in light of the on-going COVID-19 pandemic, our insight in the market has noted SARS upping its collection power to offset a massive budget deficit. Their aggressive collection steps include salary garnishees, Sheriff callouts and even taking money directly from businesses and/or personal accounts.
Now is not the time to take risks. SARS’ approach clearly shows we are dealing with a competent revenue authority, so why risk it when you can Compromise it!
Our multidisciplinary team of tax attorneys and chartered accountants have a proven track record of negotiating with SARS and have assisted many companies to successfully apply for a deferred payment arrangement. We guarantee legal professional privilege on your matter and follow a strict legal and compliant approach with solution-based thinking.
Full protection of legal privilege & all services quoted upfront.
Andre Daniels
Legal Manager: Tax Controversy & Dispute Resolution, LLB
Jashwin Baijoo
Head of Strategic Engagement & Compliance
Admitted Attorney, LLB, LLM (Tax)
SAIPA Tax Committee Member
Ralitza Pillay
Tax Manager: Global Mobility & Compliance