-Tax Talk- VAT objections and appeals

THE Value-Added Tax Act prescribes in section 27 and 28 what procedures must be followed to object or appeal against a tax assessment.

A taxpayer can lodge an objection against an appealable decision which includes any of the following (the list is not complete): -The value of services imported from a connected person that is less than the market value -Refusal to register, cancellation of registration, or refusal to cancel registration; -Refusal to approve an apportionment ratio -Refusal to make a refund -Amending an assessment A taxpayer must object to a tax assessment within 90 days after the assessment has been issued, unless the taxpayer submits reasonable grounds for failing to object within the 90-day period. The objection must be in writing and must specify in detail the reasons for the objection.It is important to note that the taxpayer’s objection can only be considered if the tax in dispute has been paid in full or the taxpayer has given sufficient security for the amount of tax that is unpaid and any penalty that may become payable.This is another draconian requirement of our Act but cannot be ignored.When considering the objection, the Commissioner may alter a decision, alter or reduce an assessment or disallow the objection and send a written notice to that effect to the taxpayer concerned.If a taxpayer is not satisfied with the outcome of his or her objection, he or she must lodge a notice of appeal to the Special Court for Hearing Income Tax Appeals with the Commissioner within 60 days after the date of the notice advising of the outcome of the objection.If reasonable grounds exist for lodging the notice of appeal after the 60-day period, the Commissioner may condone the late submission of the notice of appeal.The notice of appeal must be in writing and the grounds of appeal are limited to the grounds set out in the objection letter unless the court allows the addition of new grounds.The burden of proof that an assessment is incorrect or that a decision of the Commissioner is wrong is on the person objecting to an assessment or a decision.Objections and appeals are sometimes costly exercises and you should seek the correct advice before you take the Receiver of Revenue on if you want to have a better than even chance of celebrating victory.Should readers have queries, they are invited to send them to cameron.kotze@za.ey.com.The objection must be in writing and must specify in detail the reasons for the objection.It is important to note that the taxpayer’s objection can only be considered if the tax in dispute has been paid in full or the taxpayer has given sufficient security for the amount of tax that is unpaid and any penalty that may become payable.This is another draconian requirement of our Act but cannot be ignored.When considering the objection, the Commissioner may alter a decision, alter or reduce an assessment or disallow the objection and send a written notice to that effect to the taxpayer concerned.If a taxpayer is not satisfied with the outcome of his or her objection, he or she must lodge a notice of appeal to the Special Court for Hearing Income Tax Appeals with the Commissioner within 60 days after the date of the notice advising of the outcome of the objection.If reasonable grounds exist for lodging the notice of appeal after the 60-day period, the Commissioner may condone the late submission of the notice of appeal.The notice of appeal must be in writing and the grounds of appeal are limited to the grounds set out in the objection letter unless the court allows the addition of new grounds.The burden of proof that an assessment is incorrect or that a decision of the Commissioner is wrong is on the person objecting to an assessment or a decision.Objections and appeals are sometimes costly exercises and you should seek the correct advice before you take the Receiver of Revenue on if you want to have a better than even chance of celebrating victory.Should readers have queries, they are invited to send them to cameron.kotze@za.ey.com.