My story so far in dealing with SARS and how SARS can re-interpret the interpretation notes at whim. This issue with SARS was that my wife was a expat and we were claiming back from SARS our income tax, namely section 10 dealing with exemption of income tax.
My wife is the victim of SARS under handed dealings and unfortunately we have spent in a course of 3 years to trying to find out why SARS did not pay out all our exempt income tax as we we exempt and met the requirements of section 10.
First course of action was to have an ADR at SARS after SARS apportioned the refund, the raised assessment had no information regarding why SARS apportioned the refund and numerous objections had no better response to SARS either. The ADR was a year later because of objections raised and the paper work handed into SARS was lost 6 times and the chairman of the ADR did not understand what we were objecting about and that we objected numerous times against the raised assessments of SARS so finally there as an ADR. At the ADR there was an allusion to but not clearly defined issue about the 183 days not met as per section 10 requirement. We never appealed the case and SARS forwarded the case to Tax Board hearing which took about few months to get a hearing date. It was only a week, after 2 years of back and forth with SARS, that my wife had a meeting before the tax board hearing, that SARS legal team then presented the issue of non compliance of the 183 days out of the country. However it was not explained to my wife by SARS legal team, that she could submit new dates then and there to SARS legal team for verification and a audit for processing the refund could be completed. So my wife ended up at the Tax Board hearing and after handing in evidence SARS conceded.
So SARS then paid out 20% of what was due which we were now totally disillusioned with SARS. After back and forth with SARS legal team we discovered that SARS had taken to re-interpret the interpretation note of section 10 and that SARS apportioned the refund (which by the way in section 10 does not allow) you either exempt or not, so we then proceeded to hand in dates that cover the period of the financial year (which the interpretation note does state that however further reading says that the exemption applies in any period beginning or ending in the financial year). SARS raised an assessment again and apportioned the first 2 months of the dates she submitted.
Now enters the Public Protector...
After emails to the head of SARS in the province all we got was restart the whole legal process by nullifying the Tax Board ruling where SARS conceded. Really now. So I started investigating how we can proceed legally against SARS. We were cash strapped and debt piling on we could not afford a summons to be sued out R 10 000 and a further security to lawyers of about R 90 000 to go to court with and then still not be sure if you are going to win. Two URL's that helped me tremendously
1. http://books.google.co.za/books?id=U...ed=0CEYQ6AEwBQ is an excellent book on constitutional right to property which includes your money at SARS.
2. http://www.google.co.za/url?sa=t&rct...47534661,d.dmg which provided me the understanding of legal cases with SARS.
I then discovered that SARS has a SERVICE CHARTER which when I reviewed how SARS has handled my wife's case has violated the basic values and promises of SARS SERVICE CHARTER to which end I understood that SARS has committed mal-administration (infringed on my constitutional right) to a fair and just administration.
My case has been at the Public Protector for 8 months and 3 weeks, in which it 2 months for the Public to allocate a case officer. Up to this date SARS has not responded to the Public Protector's letters requesting why SARS has not giving my wife a written letter as to the apportionment which according SARS service charter should have been done. They have 10 days ago said they will send their final report to the Public Protector shortly. Still waiting after 5 months of no response from SARS.
I forgot to mention that when SARS heard of my letter to the Public Protector my wife and I were granted a urgent meeting with the different heads of SARS departments to discuss apportionment of the refund. We were told shown how SARS re-interpreted the interpretation notes which left us still wondering how they got their interpretation in the first place. There is nothing in the interpretation note that says mentions apportionment.
What I have learnt from this...
1. That all correspondence with SARS regarding letters of dis allowance must contain the reasoning why they disallow the objection.
2. At the ADR meeting SARS must give in writing a valid reason for their dis allowance of your case.
3. SARS must explain your rights and remedies to your case and not allude or hint but be clear and communicate in lay man's terms.
4. SARS only pays out interest on VAT returns and provisional tax, PIT, private individual tax is not paid out interest on delayed refunds, if all of the individuals taxes are paid up and other exclusions in section 89 SARS Tax law dealing with this.
5. Mora interest can be paid out by SARS. To claim Mora interest one has to put SARS in Mora, which means a letter of demand must be sent and signed by a SARS employee and must be addressed to the commissioner of SARS. I have sent a letter of final demand to SARS to which they replied that I have never asked for interest for the delayed refunds. This is a bit complicated as I can only ask for Mora interest when Tax Board final judgement was sent to me. SARS rules says that only interest can be asked once the outstanding matter has been heard and settled. Fortunately all electronic correspondence is accepted in South Africa and I had sent a email to the SARS employee who handled our Tax Board case asking for interest.
6. If you are offered a expat employment outside of South Africa, this is what I have learnt regarding employment contact:
6.1 Must state that the name and address of the foreign company in the country that you going to work for.
6.2 Any reference of your returning to South Africa should be that you are returning to renew visas, to ready for emigration and you will use your discretion whilst in South Africa. IF the contract states that you will work in a office in South Africa whilst waiting for a visa SARS will penalize and apportion your income tax exemption for days worked in South Africa.
7. Open a offshore account where Double Tax Treaty is enforce and get paid into that account and then bring the money into SA account. When paid a salary in RSA and you work abroad you are obliged to pay income tax to SARS. It is better to be paid a salary offshore and bring it in to your local bank account when you submitting your IRP 5 form you submit your contract and payslip with passport exit and entry dates. Let SARS tell you how much you owe them and you fight them for every cent which is less expensive and time consuming, than when SARS has your money and you have to fight them!
I do not purport that I am expert tax consultant or tax practitioner, I am merely writing my own experience to share amongst fellow South Africans.