What do SARS’ new dispute resolution rules mean for you?

The general feeling among tax experts is that the new rules favour taxpayers. But what do they mean for YOU? Sentinel’s resident tax expert, Michelle Tickner, has all the answers…

On 10 March 2023, new dispute resolution rules were published under section 103 of the Tax Administration Act, replacing the previous set of rules promulgated in 2014. Taxpayers should familiarize themselves with the amendments, specifically regarding time periods. 

Which rules apply to me?

The new rules apply to all current Chapter 9 dispute proceedings. New procedures may be conducted under the old rules, provided the time-period under the applicable previous rule has not yet expired. For existing disputes, the procedures contained in the new rules may be adopted, provided that the period provided for under the old rules has not expired. 

Where an objection or appeal could have been lodged before the commencement date of the new rules but is lodged after the prescribed period under the old rules, you’ll have to apply for condonation from SARS.

How have the rules changed?

Some of the most significant changes in the new rules include:

• The extension of the objection period from 30 to 80 business days, and the obligation to attach all substantiating documents to an objection. This means that taxpayers must submit all supporting documents to substantiate their grounds of objection. SARS can still request outstanding documentation after the submission of the objection. 
• The shortening of dispute resolution time periods by agreement between the parties or between one of the parties and the clerk or Registrar of the Tax Board or Tax Court. 
• The categories of persons who can serve as an Alternative Dispute Resolution (ADR) facilitator have been broadened. The rules now stipulate that the facilitator must be a person acceptable to both parties (SARS and the taxpayer). In the past ADR facilitators were often SARS employees.
• A deadline for the delivery of the ADR facilitator’s interim report has been introduced. The interim report must now be delivered within 5 days of the conclusion of the ADR meeting and the final report must now be submitted no more than 10 days after the end of the ADR proceedings.
• In an effort to enhance the confidentiality of ADR proceedings, courts can no longer permit the issuing of subpoenas to persons involved in ADR proceedings. Nor can they compel the disclosure of representations made or documents tendered during ADR proceedings. 
• Several amendments have also been introduced regarding the issuing of subpoenas as part of Tax Board and Tax Court processes, ostensibly to deter the use of subpoenas as an abuse of process. 

Saving the best for last

A very welcome amendment to Rule 44 is the insertion of sub-rule 8. This compels SARS to issue an assessment within 45 days of receiving the Tax Court’s decision from the Registrar, provided that no appeal is lodged by SARS. This will counteract the longstanding issue of SARS taking too long to issue revised tax assessments.

The bottom line

At the risk of generalising, the new rules appear to benefit taxpayers. They give taxpayers more time to lodge objections, and they should prevent SARS employees from serving as ADR facilitators. The new rules also seek to enhance the confidentiality and efficiency of ADR proceedings. And, very importantly, they compel SARS to issue revised tax assessments within a reasonable time period.If you have any questions about the new dispute resolution rules, please don’t hesitate to contact Sentinel International. Our super-specialised team of tax experts would love to help.