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Thread: Prescription act?

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    New Member cnel_za's Avatar
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    Unhappy Prescription act?

    I left the country in Jan 2004 and went off to Egypt for 5 years. On my return in November 2009 I reactivated my Tax Number with SARS and returned to the workforce in South Africa. In 2010 when I went to do my tax I was informed that I owed them +- 50K. After several long hours in line and some years later we are at the point now where we know what the problem is. Tax year 2004 IRP 5 was never filed and SARS did estimation on my income for the year. The lady that did my tax for me those years is regrettably no longer with us and her office is also gone. Go get one from your employer at the time they tell me, however I am told categorically that the company does not keep anything older than 5 years although in their defense they did try valiantly to dig something up for me. The company referred me back to SARS stating that SARS would have received a soft copy of this in 2004. According to SARS they did not receive anything from my employer however they did get an IRP 5 from my Provident Fund for the same tax year. My question is this. Am I legally expected to produce paperwork for 2003 / 2004, now seven years later, based on an assessment that happened more than 5 years after the tax year in question bearing in mind that I stopped working in mid 2003? I have looked on the web and opinions on how long one is legally required to keep documentation for Personal Tax vary from 3 years to 30 years depending on who you read. Can somebody please help.

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    Gold Member Singhms's Avatar
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    I am not an accounting expert, but I think it is 5 years that you need to keep records for?

    However the part I am not sure about is if they argue that you should of challenged the assessment during that period and the fact that you did not they assumed it to be correct?

    Is there a requirement to inform SARS that you are leaving the country?

    Also if you went to egypt for 5 years to work as an expat you would of been required to pay tax to SARS during that period?

    I am sure someone will be able to answer in more detail
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    New Member cnel_za's Avatar
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    Angry

    Ironically I obtained a tax clearance from SARS as a prerequisite to working in Egypt (Tax year 2003/ 2004 not included in the clearance) and as I was taxed at source in Egypt the tax man did not have issues with the years that I worked away. The assessment for 2004 tax year was only done in 2009 more than 5 years later. As far as I know an assessment has to be challenged within 3 years or it stands. I am panicking because we are almost there and I have made no headway with this.

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    Site Caretaker Dave A's Avatar
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    Quote Originally Posted by cnel_za View Post
    Tax year 2004 IRP 5 was never filed and SARS did estimation on my income for the year. The lady that did my tax for me those years is regrettably no longer with us and her office is also gone. Go get one from your employer at the time they tell me, however I am told categorically that the company does not keep anything older than 5 years although in their defense they did try valiantly to dig something up for me. The company referred me back to SARS stating that SARS would have received a soft copy of this in 2004. According to SARS they did not receive anything from my employer however they did get an IRP 5 from my Provident Fund for the same tax year.
    Perhaps try to finalise the 2004 return based on the IRP5's issued with SARS on file. How are they going to argue other income without records?

    The best post I've seen on prescription is post 4 here. Unfortunately there seems to be a bit missing when it comes to the mortgage bonds and tax section. I couldn't work out whether it meant 15 years or never...

    What I do know is that when you die and your estate is wound up, SARS can revue your estate against your entire tax history, so perhaps tax debts don't prescribe
    The trouble with opportunity is it normally comes dressed up as work.

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    New Member cnel_za's Avatar
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    Well I can’t have this thigh haunting me in my grave, might drive me to it though. I have filed an objection for the Tax year 2004 and submitted the 3 pieces of paper that I did manage to dig up. One was the 2nd last pay slip that I got from the company indicating PAYE as well as monthly salary. The 2nd a bank statement reflecting my last salary and my Provident payout and third a copy the IRP5 submitted by the Provident Fund given to me by SARS. I am hoping that I get better results from a commissioner than the bland “can’t help you without an IRP5" that I have been getting for the last while over the counter. What I need to work on now is plan Z in case one of the bland bodies got promoted and are now dishing out "I can’t help you without...." and I need to take this further. The other helpful bit of info that I got from SARS is pay the 50K and my problem will go away. It seems to me that they assume that if you can't produce an IRP5 then you automatically have not paid tax. Whatever happened to "Taxed at Source"?

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