AUTHOR: STEVEN JONES
Do you have a complex transaction, and don’t know which way SARS will go? Ask them upfront!
MANY ENTITIES enter into complex transactions where the tax issues are not cut and dried, but the risk of SARS ruling against them is too great.
The good news is that since October 2006, there has been a mechanism for you to apply to SARS for a ruling before the transaction is entered into. These rulings are known as Advanced Tax Rulings (ATRs), and allow you to have certainty from a tax point of view before you go ahead with the particular transaction.
Previously, reliance on a ruling issued by a SARS branch office was problematic, since such rulings could be withdrawn at any time and would not hold much weight in legal proceedings. Under the ATR system, you can apply for a ruling that is binding both on the taxpayer and on SARS.
ATR applications must be submitted electronically via the SARS E-filing website (www.sarsefiling.co.za). An initial application fee of R2 500 for SMMEs or R14 000 for other taxpayers is payable on submission.
There is also a cost recovery fee which depends upon the complexity of the proposed transaction, as well as the issues raised in the application.
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