If you are aggrieved by an assessment or decision issued by SARS (South African Revenue Service), you have the right to object. However, it’s important to note that you cannot object to a self-assessment, such as Value-Added Tax (VAT) and Pay-As-You-Earn (PAYE), unless a revised assessment has been raised by SARS.
When Can You Object?
You can object to:
- The assessment of your taxable income or any decision made by SARS.
- The imposition of certain administrative non-compliance penalties or interest where your request for remission was not granted or was only partially allowed. Examples include:
- Late payment penalties for VAT, PAYE, Unemployment Insurance Contributions (UIC), and Skills Development Levies (SDL).
- Late payment penalties on provisional tax.
- Late payment interest on provisional tax, VAT, and PAYE (excluding UIF or SDL).
- Late submission or non-submission penalties on Personal Income Tax (PIT), Corporate Income Tax (CIT), and PAYE.
How and When to Lodge an Objection
An objection must be submitted within 80 business days after the date of the assessment or SARS decision. If you have requested reasons for the assessment, the objection must be submitted within 80 business days after:
- The date of the notice from SARS confirming that adequate reasons have been provided and that no further reasons will be given.
- The date SARS provides you with the reasons or further reasons.
How to Lodge an Objection
You can lodge your objection through the following methods:
- Online via eFiling: An automated dispute process is available that ensures compliance with legislative requirements, reducing the risk of submitting an invalid objection.
- At a SARS Branch: You can also submit your objection in person at the nearest SARS branch.
Disputing Interest and Penalties
When disputing the imposition of certain interest or penalties, the following source codes must be utilized:
- 9987: Tax-free investment penalty.
- 9990: Underestimation of provisional taxpayer (Paragraph 20).
- 9991: Non-submission of provisional taxpayer (Paragraph 20A).
- 9992: Omission of Income.
- 9988: Underpayment of Provisional Taxpayer (89Q(2)).
- 9993: Late or non-submission of tax return.
Important Time Periods to Be Aware Of
- SARS has 60 business days to respond to your objection.
- If additional documents are needed, SARS can take another 45 days to review them.
- SARS must notify you of their acceptance or rejection of your dispute within 30 days from the date of submission.
- If SARS needs more than 60 working days to review your dispute, they must notify you before the 60-day deadline expires.
What is an Appeal?
If you disagree with the outcome of your objection, you have the right to appeal against that decision to the Tax Board or Tax Court.
When Can You Lodge an Appeal?
You must lodge your appeal within 30 business days after receiving the outcome of your objection. A senior SARS official may extend this period:
- By 21 business days if satisfied that reasonable grounds exist for the delay.
- By up to 45 business days if exceptional circumstances justify the delay.
What to Expect When You Appeal
The appeal may be resolved through:
- Alternative Dispute Resolution (ADR).
- The Tax Board and/or the Tax Court.
For specified PIT, CIT, and VAT exceptions, a manual process is prescribed for appeals. Use the ADR2 form (Notice of Appeal), which must be submitted:
- At the nearest SARS branch.
- By email to contactus@sars.gov.za. (Note: The ADR2 cannot be submitted electronically via eFiling.)
Alternative Dispute Resolution (ADR)
After submitting a valid appeal, SARS and the taxpayer may mutually agree to resolve the appeal through the ADR process. This less formal process is typically quicker and more cost-effective than court proceedings.
The taxpayer must indicate in the Notice of Appeal if they wish to use ADR procedures. If SARS believes the matter is appropriate for ADR, they must inform the taxpayer within 30 days of the appeal. If the taxpayer does not express a willingness for ADR, but SARS deems it suitable, they will notify the taxpayer accordingly.
If ADR proceedings are terminated, the taxpayer must request the clerk of the Tax Board or registrar of the Tax Court to set the matter for formal hearing within 20 days.
Finalizing the Appeal
SARS aims to:
- Finalize ADR proceedings within 90 business days unless otherwise agreed.
- Issue an assessment to effect any agreement or settlement within 45 business days after the last signing of the agreement.
For Tax Board appeals, the chairperson aims to issue a decision within 60 business days after the hearing, and a copy of the decision will be delivered within 10 business days.
