Breytenbachs Cross Border Advisory

Alternative Tax Disputes Advance Tax Rulings

Many of our clients prefer to file their own tax returns online. Others prefer to mandate their SA family or other trusted relative or friend. Sadly tax disputes are on the increase and BCBA is able to assist all our clients, their local tax filer or tax advisor to object and file a tax appeal against a SARS decision or incorrect assessment. This service can be provided without us being involved in the actual tax preparation or tax filing.

Tax disputes are often prevented through an advanced tax ruling issued by SARS or by obtaining a so-called section 223 tax opinion from a tax practitioner.

In terms of the Tax Administration Act, 2011, only a SARS registered tax practitioner may issue the so-called section 22.3 opinion. Provided the taxpayer obtained the opinion prior to the tax filing deadline, from a duly registered independent tax practitioner, SARS may not raise penalties for substantial understatement of taxable income.

Claiming and being sure one is duly untitled to claim a tax deduction or a tax treaty exemption, is often rather risky. Hugo van Zyl is a SARS registered master tax practitioner and is able to either issue a section 223 opinion or facilitate obtaining an SARS issued advanced tax (ATR) ruling.

The ATR process is expensive, drawn out and only as reliable as the information provided to SARS. Incorrect disclosures or inadequate information/ background study may result in a very expensive SARS ATR ruling being rendered useless. Once again BCBA is able to advice, assist or facilitate a tax opinion, obtain tax rulings and in the unlikely event of a dispute, lodge your tax objection or appeal on your behalf. Due to the SA Court processes being expensive and a drawn out process, SARS introduced an alternative dispute process, known as the ADR process. Being duly registered with SARS, BCBA’s tax team is able to assist in this more informal, but often lost effective alternative tax dispute process (ADR).

The ADR process is undertaken once the tax assessment is issued. The ATR system allows for advance rulings before the transaction is entered into. The section 223 opinion covers the period between the transaction date and the obligatory tax filing date. For income tax and capital gains, the window of opportunity maybe 12-18 months, yet VAT, PAYE or other more regular tax filing, the window of opportunity may be less than 25 calendar days.

It is therefore important to contact BCBA at your earliest convenience.