Taxpayers who have a dispute with the South African Revenue Service (SARS) can now benefit from new rules that aim to simplify and expedite the resolution process. The new rules, which came into effect on 1 July 2023, replace the previous dispute resolution rules that were in place since 2003.
The main features of the new rules are:
- A pre-dispute resolution mechanism that allows taxpayers to engage with SARS before lodging an objection or appeal, and to request reasons for an assessment or decision if they are not clear or adequate.
- A revised objection and appeal process that reduces the timeframes for both parties to submit documents and evidence, and introduces penalties for non-compliance with the rules.
- A streamlined alternative dispute resolution (ADR) process that encourages the use of mediation, conciliation or facilitation to resolve disputes without going to court.
- A simplified tax court procedure that allows for the appointment of a single judge, the use of electronic communication and filing, and the possibility of awarding costs against the unsuccessful party.
The new rules are expected to improve the efficiency and fairness of the tax dispute resolution system, and to reduce the backlog of cases that have been pending for years. They also align with international best practices and standards, such as the OECD's Model Tax Convention and the UN's Practical Manual on Transfer Pricing.
Taxpayers who have a dispute with SARS should familiarise themselves with the new rules and seek professional advice if necessary. Please do not hesitate to contact our offices in this regard.