Administrative non-compliance penalties are typically levied where a taxpayer had a duty to provide SARS with certain information or to complete a tax return but failed to do so. The examples of where SARS is empowered to levy an administrative non-compliance penalty include the following:
- Where taxpayers have failed to complete an income tax return in accordance with the public notice;
- If a participant to a “reportable arrangement” failed to report that arrangement; and
- If a taxpayer failed to submit a provisional tax return, where it was required to do so.
Administrative non-compliance penalties can either take the form of a fixed amount of penalty which is chargeable for each month that the administrative non-compliance is not remedied, or it can be in the form of a fixed percentage penalty.
Certain administrative non-compliance penalties qualify for remission to the extent that it is the first time that the taxpayer committed such a non-compliance and that reasonable grounds for the non-compliance exist.