South Africa: Tax dispute resolution
International Tax Review is part of the Delinian Group, Delinian Limited, 4 Bouverie Street, London, EC4Y 8AX, Registered in England & Wales, Company number 00954730
Copyright © Delinian Limited and its affiliated companies 2024

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

South Africa: Tax dispute resolution

dachs.jpg

Peter Dachs

In developed markets, major tax litigation is principally run by law firms. Fortunately, over the last decade, various South African law firms have built the necessary capacity to run tax dispute resolution matters from the first South African Revenue Service (SARS) query to the Supreme Court of Appeal in Bloemfontein. It is important to realise that the dispute resolution process starts with the first SARS query. The response must be drafted in a manner which considers the possibility of the end game being witnesses giving evidence under cross-examination in court.

Therefore, any incorrect factual allegation in the response to the query, however innocently made, may come back to bite the taxpayer later in the dispute resolution process. In addition it is important that any factual statement can be proved by the taxpayer. This requires an understanding of who the relevant witnesses may be, where they are and what they are going to be able to say to support the various factual allegations in the response to SARS.

In respect of the court process, no-one wants to go to court. It is costly, time consuming and absorbs senior management resources. There are plenty of opportunities to settle a tax dispute matter before court. These include the alternative dispute resolution process as well as other settlement meetings with SARS.

An understanding of the tax technical aspects of the dispute by the taxpayer is simply not sufficient at these meetings. They also require people skilled in dispute resolution and with a proper understanding of the prospects of success at trial. For example, it is not possible to understand whether a proposed settlement is a good or bad settlement for the taxpayer unless it has an understanding of its prospects of success at trial. This, in turn, requires an understanding not only of how strong the tax technical position of the taxpayer is in relation to the tax dispute, but also the ability of the taxpayer to prove its case through its witnesses.

South African taxpayers are now following the rest of the developed world in understanding the complexity of the tax dispute process and using law firms to provide the relevant expertise in these matters.

Peter Dachs (pdachs@ens.co.za)

ENSafrica – Taxand

Tel: +27 21 410 2500

Website: www.ens.co.za

more across site & bottom lb ros

More from across our site

Barbara Voskamp is bullish on hiring local talent to boost DLA Piper’s Singapore practice, and argues that ‘big four’ accountants suffer from a stifled creativity
Chris Jordan also said that nations have a duty to scrutinise the partnership structures of major firms, while, in other news, a number of tax teams expanded their benches
KPMG has exclusive access to the tool for three years in the UK, giving it an edge over ‘big four’ rivals
But the US tax agency’s advice is consistent with OECD guidance and shouldn’t surprise anyone, other experts tell ITR
A survey of more than 25,000 in-house counsel reveals that diversity initiatives are a high priority when choosing external counsel
The report is aimed at helping 'low-capacity countries', the OECD has claimed
The UK tax agency appears to be going after easier, lower value targets, one lawyer has claimed
Criminal experts have told ITR that the case of Ulf Johannemann emphasises the fine line between tax avoidance and tax evasion
The ATO workers were among nearly 57,000 people who were duped into claiming fake GST refunds, while Kuwait signed a double taxation treaty with the UAE
However, ICAP may not provide the legal certainty of an APA and tax authorities will have limited capacity, experts argue
Gift this article