Have you received a letter of demand from SARS, but are not in agreement with the assessment?
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 as soon as possible. A request for suspension of payment is a request made to SARS that a tax debt temporarily be suspended, pending the outcome of a dispute.
Further, 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.
Section 164(6) of the Tax Administration Act further protects the taxpayer by providing that even where the request has been denied, SARS may not proceed with collection proceedings for a period of 10 business days after the request has been denied.
In the event that SARS does proceed with collection steps against the taxpayer within that period, it is essential that the taxpayer be aware of the legal avenues available to him.
Do you feel as if you are turning the corner in terms of economic recovery in these tough times but simply cannot pay a large tax debt owed to SARS within the prescribed period? Why not take a short payment holiday!
A deferral of payment could be exactly what you need to allow your finances some much needed recovery time. If you are owing a large tax debt it is better to act swiftly. Where SARS is approached correctly, a tax debt can be paid off through a formal payment arrangement known as a deferral, whereby you can either settle your entire tax debt at a later stage, or even pay it in installments over an agreed time period.
There are numerous debt relief mechanisms available from SARS, with the most cost efficient of them all, being a Compromise of Tax Debt application (“the Compromise”), which is aimed at aiding taxpayers to reduce their tax liability by means of a Compromise Agreement (“the Agreement”) and helping to keep the cash constrained taxpayer afloat until some financial reprieve is in sight.
Where SARS is approached correctly, a tax debt can be reduced, and the balance paid off in terms of the Compromise, allowing some much-needed breathing room, and helping taxpayers all over the country to become tax compliant.
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.
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