TAXPAYERS BEWARE – TAX ADMINISTRATION ACT DEADLINES
The definitions of "date of assessment" and of “assessment” in the TAA differ from that in the Income Tax Act, No 58 of 1962, (“the ITA”):
The ITA defines the “date of assessment” as the “due date” as specified in the notice of assessment, while the TAA defines it as the day on which the assessment is “issued”, which presumably refers to the day on which the notice of assessment is generated by the SARS system.
The definition of “assessment” in the ITA required the assessment to be served upon the taxpayer, while the definition of assessment in the TAA apparently does not refer to service.
This is a substantial difference, as the new definition does not allow for “mail time”, which may be fine in the context of e-filing and/or e-mail correspondence, but one cannot ignore the reality that a number of taxpayers still rely on snail-mail (ordinary post). Section 253(1) of the TAA specifically provides that a document “is regarded as received … at the time when it would, in the ordinary course of post, have arrived at the addressed place”. In terms of section 253(3), if SARS is satisfied that a document has either not been received, or has been received “considerably later than it should have been received”, the document must be withdrawn and be issued, given, sent or served anew.
One cannot help but think that this will lead to numerous disputes between SARS and taxpayers.
The rules issued in terms of section 107A of the ITA dealing with objection and appeals (“the Rules”), will (despite the fact that this section has been repealed by the TAA) continue to apply, until replaced by new rules issued in terms of section 103 of the TAA (“the rules”). However, this results in some uncertainty regarding the manner in which the number of days should be counted:
In terms of section 104 of the TAA, an objection must be submitted within the period prescribed in the rules. The (current) Rules provides for a period of 30 days for submission of an objection, but days are defined as "days" as contemplated in section 83(23) of the ITA, which excludes Saturdays, Sundays or public holidays. However, section 83 has been repealed by the TAA. Although the TAA contains a definition of "business day" which is similar to the definition of "days" in section 83(23), technically, this does not apply as the Rules do not refer to “business days”. It appears from the SARS guide to the TAA that the 30-day period refers to business days, and the new rules will hopefully remove any uncertainty in this regard.
In terms of section 244 of the TAA, if the date for a deadline (e.g. for the payment of an amount, a submission or other action), falls on a Saturday or Sunday, the deadline is effectively brought forward, as section 244 provides that "the action must be done not later than the last business day before the Saturday, Sunday or public holiday". On the understanding that the 30-day period for submission of an objection refers to “business days”, section 244 of the TAA should not apply to the submission of objections. However, it is still important to keep this in mind for purposes of other deadlines in terms of the TAA, such as the provision of information to SARS, etc. One should also note that SARS may now in terms of section 244(2) prescribe the time of day by which certain action must be taken. If the action is taken after this time, it will be regarded as done on the next business day. This will certainly demonstrate the difference between what SARS regards as “close of business” and what the reality for most businesspersons is!
To conclude, although the TAA objection and appeal process may at first glance appear to be very similar to that provided for in the ITA, there are some material differences which may impact on the validity of a taxpayer’s objections. Taxpayers beware!