Tax Risk Insurance
SARS tax audit or dispute?
Don't carry the weight alone.
Effective insurance protection against SARS tax audits and related disputes.
IF YOU, YOUR COMPANY OR YOUR TRUST is selected for audit by the South African Revenue Service, or if there is a dispute about a tax assessment following an audit whereby SARS is unfairly demanding additional taxes from you, then tax risk insurance will appoint and pay for a team of highly qualified tax professionals to deal with the matter on your behalf, ensuring a fair tax audit and dispute outcome. Terms and conditions apply.
SARS is conducting more tax audits than ever before, which leads to more disputes.
Having a great tax accountant does not guarantee that you wouldn't be selected for audit.
Audits and disputes can be complex, stressful and costly.
Many tax re-assessments are irrational, and SARS doesn't always follow procedures and timelines.
The cost to successfully defend a tax audit or related dispute is debilitating.
Some of SA's best tax specialists are appointed to represent you during claims.
Peace of mind when you need it most.
SARS tax audits and disputes are complex, stressful and very expensive.
It's like having a team of tax attorneys and accountants on retainer, but at a fraction of the price.
Effective cover against SARS tax audits and related disputes
for businesses, individuals and trusts.
Tax Risk Insurance is distributed by a national network of authorised insurance brokers. Call your broker now to find out if they offer tax risk insurance. Or contact us and we'll introduce you to one of our approved brokers.
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Frequently Asked Questions
If you, your business or your trust is selected for a SARS tax audit, or if you become the subject of an unfair, incorrect or irrational tax assessment, then we will appoint and pay for a team of highly skilled tax professionals who will deal with your case. This team may include tax attorneys, auditors, tax advisors, accountants and any other tax specialists as may be required to ensure a fair outcome. Your own trusted tax accountants will form a central part of this team, and their costs will be covered for the duration of the claim.
Considering the risk you are facing - not a lot! For the cost of less than the average business lunch, Tax Risk Insurance will deal with your tax audit problems efficiently.
Premiums are dependent on your annual taxable income for personal taxpayers or annual turnover for companies. Click here to find out more.
All taxpayers are at risk. Tax audits are an essential part of SARS's mandate to ensure compliance. An audit may be triggered for various reasons, such as discrepancies between declared income and actual financial data, lifestyle audits, red flags from SARS's automated tax system, or random selection. While most audits can be resolved quickly by providing the requested supporting documentation, some may become invasive or lead to incorrect or unfair tax reassessments, resulting in demands for additional tax payments. This then leads to disputes with SARS, which are stressful, time-consuming, and costly for both businesses and individuals.
The audit and dispute process requires careful handling of financial records, a thorough understanding of tax laws, and knowledge of the rights afforded to taxpayers. It also involves following the proper procedures for a swift resolution. This requires significant time and effort, often necessitating the involvement of external experts, such as tax attorneys, especially in complex or litigious matters. Unfortunately, most taxpayers do not budget for these types of problems. Even if, in the end, there is nothing wrong with your tax affairs, you will still be responsible for paying the bill from your tax advisors for their services.
On the other hand, Tax Risk Insurance provides a solution. With this insurance, a team of top tax professionals will be appointed and paid for to represent you during a SARS tax audit and related dispute. Your own trusted accountants will be a central part of this team, and their fees will be covered by the policy.
Revenue collection authorities have been raising the standard when it comes to tax collection. The financial downtrend worldwide and in South Africa has resulted in SARS upping their game to collect more revenue and in doing so, they’ve become much more efficient. Linked to this trend is the fact that SARS has been given wide legislative powers through the Tax Administrations Act.
Historically, SARS has exceeded its audit coverage targets almost every year. This is the unnerving reality – SARS are now auditing more taxpayers more often – and statistically, there’s no reason why you couldn’t be next.
Each taxpayer must purchase his / her / its own policy because only the taxpayer named in the policy will receive cover under that policy. So, if for example you have two businesses, a trust, and two shareholders, you may consider purchasing five separate Tax Risk Insurance policies – one for each taxpayer.
No. The costs of preparing your routine tax returns are not covered and those remain your own responsibility, as before. Requests from SARS to supply supporting or verifying documentations and information in support of your filed tax return are therefore also not covered.
Remember, insuring yourself against the risk of a SARS tax audit does not absolve you from paying your taxes correctly and filing your returns. You must continue to pay your taxes as expected - not only is it the law, but it’s also the right thing to do.
No. Penalties and interest that are justifiably imposed by SARS are not insurable. We’ll ensure that you receive the best representation in the event of a SARS audit, which will guarantee a fair audit outcome, including that any penalties and fines are legitimate and fair.
Our policy wording provides a full explanation of what is not covered. For a summary of the most important exclusions, please download our brochure here. You may also request a copy of the brochure and the full policy wording from us at info@taxrisk.co.za. Or speak to your financial advisor.
Yes – errors are human. As long as there is no fraud or willful tax evasion, we will continue with cover as normal.
All tax practitioners are required by law to maintain professional indemnity insurance. If you've been prejudiced by professional negligence on the part of your tax practitioners, you may take issue against their professional indemnity insurance. Professional indemnity insurance is quite separate from your Tax Risk Insurance policy.
Cover will not operate in the event of fraud and tax evasion. It’s absolutely important that taxpayers continue to pay their taxes as required, and we encourage our clients to comply.
Yes. There is an aggregate annual Rand and number of hours of service limit, and a per claim limit. The limits of indemnity is listed together with our quoted premiums, here.
We only cover local taxes payable to SARS. Taxes payable outside of South Africa or on revenue generated outside of South Africa, or anything relating to exchange control, customs and excise, foreign exchange, transfer pricing etcetera are not covered under this policy.
A claim starts when you’re notified of a SARS tax audit, or when you become aware of an unfair or incorrect SARS tax assessment in terms of which they unfairly demand additional taxes from you. This is usually notified by way of a letter from SARS.
You must contact us within 30 days of you becoming aware of a SARS tax audit or dispute.
You must notify us as soon as possible, but no later than 30 days from the date the SARS tax audit starts. We’ll then send you a claim form and take complete control of the matter from there. Critically for you, if you’re covered by a Tax Risk Insurance policy, your SARS tax audit problems becomes ours, immediately.
Yes. Each claim carries an excess (i.e. the first amount payable by you in the event of a claim) of 10% of the claim amount, with a minimum of R1 500. The claim amount is the Rand value of the fees we've paid to the team of tax professionals appointed to defend you case.
Bryte Insurance Company Limited, a licensed non-life insurer and authorised financial services provider, FSP17703.
Tax Risk Underwriting Managers (Pty) Ltd is an authorised financial services provider, FSP46467
