• Posted on Aug 10, 2022

Here’s a big win for the little guy. Going up against SARS can be daunting and complicated, as was seen in the recent case of Total Human Resources v Commissioner for the South African Revenue Service. Here, the court considered whether interest accrued to the taxpayer on outstanding Employment Tax Incentive (“ETI”) credits in terms of the Tax Administration Act (TAA) or the Common Law. Prior to this judgement, there was much uncertainty surrounding interest on these claims since all tax legislation was silent on this point.

Here’s a big win for the little guy. Going up against SARS can be daunting and complicated, as was seen in the recent case of Total Human Resources v Commissioner for the South African Revenue Service. Here, the court considered whether interest accrued to the taxpayer on outstanding Employment Tax Incentive (“ETI”) credits in terms of the Tax Administration Act (TAA) or the Common Law. Prior to this judgement, there was much uncertainty surrounding interest on these claims since all tax legislation was silent on this point.

This is where having a Tax Risk Insurance policy becomes crucial. Instead of facing complex disputes like this alone, Tax Risk Insurance provides the taxpayer with access to top tax practitioners and legal counsel to contest such matters with SARS, including paying the taxpayer’s own accountants’ fees for services for the duration of the claim.

As a result of the efforts of tax attorney Stuart Bentley and Schalk Pieterse from TRM Tax Attorneys representing the applicant, it is now law that the taxpayer can charge interest on their ETI refund claims. The interest component often amounts to significant amounts and can run into hundreds of thousands of Rands, even millions of Rands, in some cases. Thus, where refunds are unlawfully withheld by SARS, the taxpayer can now receive the interest on such refunds provided the refund claims comply with the ETI Act.

The court found that interest accrues from the first day after the final day for the submission of the EMP501 reconsolidations, which are due every six months. The Court made an important observation in terms of the relationship between SARS verifications and interest calculations, and held that a verification action by SARS does not suspend the accrual of interest.

Speak to your broker now about Tax Risk Insurance, or visit us at www.taxrisk.co.za.

Pieterse Sellner Erasmus TRM Tax Attorneys is a specialist firm of tax attorneys that offers clients practical solutions and complete peace of mind.