What should I do?
A taxpayer’s right to dispute the legality of actions and decisions within the tax system is fundamental to the fairness of the system.
As a first step to disputing your assessment, you may request SARS to provide its reasons for the tax assessment (i.e. Notice of Assessment (IT34)) within 30 business days from the date of the assessment. A request for reasons is submitted via eFiling.
Under the new tax dispute rules, you have 80 business days from the date of the assessment, or if you requested reasons from the date that reasons were provided, to lodge your objection. The objection must be made in the prescribed form (ADR1) via eFiling and must include detailed grounds for the objection.
If eFiling is unavailable, you must submit your request for reasons or objection at a SARS Branch Office or via SARS telephonic appointment.
If you are not happy with the outcome of your objection, you may appeal against SARS’ decision. You must lodge your appeal within 30 business days from the date of the outcome of the objection in the prescribed form (ADR2) via eFiling, which must include the detailed grounds on which the appeal is founded. You can elect to either appeal by way of:
- Alternative dispute resolution (ADR), in which case the taxpayer and SARS will attempt to reach a settlement of the matter before a facilitator; or
- Litigation, in which case the appeal will be determined through a hearing before either the tax board or the tax court, depending on the amount of tax in dispute. Litigation can be a lengthy and costly process.
And yes, “Pay now, argue later” still applies. Raising a dispute against an assessment does not automatically suspend the obligation to pay the tax due in terms thereof. If you intend to dispute an assessment in terms of which you owe an amount to SARS, you may request SARS to suspend the obligation to pay the tax due. The suspension will have effect from the day the request is submitted and will remain in place until either SARS disallows the request, or the taxpayer fails to submit the intended dispute by the due date.
Each stage of the dispute process is characterised by prescribed rules and periods that apply to both the taxpayer and SARS. For this reason, it is essential to consult your tax experts regarding the specifics of your case and the best route forward.