Mullins said it`s very tempting to bury your head in the sand and hold back SARS payments, but they will always catch up with you in the long run, and harsh penalties can be applied if payments are missed or underpaid. Where a taxable person is unable to pay a tax debt of a single amount within the prescribed payment period, a formal instalment payment scheme shall be provided for in accordance with the prescribed criteria and procedures. A tax liability can be paid at a later date or in several instalments through an agreement called a deferral. (a) the debtor was a party to an agreement with SARS on the endangerment of an amount of tax debt during the three-year period immediately preceding the request for a compromise; The purpose of this guide is to assist the taxpayer in entering into a payment agreement for the electronic filing of outstanding debts. This feature allows taxpayers to request a payment agreement without having to visit a SARS branch or contact the SARS contact centre. Tip 1: The payment agreement must cover the entire debt, and SARS can only consider the request for a payment agreement if the non-compliance has been corrected (i.e., all returns and/or recalls will be submitted). Tip 2: If the taxpayer is in default of prior payment, reasonable and valid reasons for the default must be provided before another deferral request can be made. If it is determined that the company is fit to compromise, a senior SARS official and the authorized official sign a compromise agreement that states the following: When submitting a request for payment procedures, a series of primary validation checks are carried out using the tax reference number and the type of tax. If the taxpayer does not pass these primary validations as mentioned below, he will be prevented from proceeding with the payment agreement request and the corresponding validation error message(s) will be displayed. The taxpayer must then contact SARS to correct the error posted on the e-filing.
Cancel – If you cancel the automatic simulation, it will be ignored/deleted and you will need to start the process from the beginning if you want to request a payment agreement. After that, the user enters their contact details and their preferred payment method. The request for suspension of payment can be requested during the processing of the dispute. Interest accrues on unpaid debts. Call the contact center or go to the nearest branch for help. Don`t forget to make an appointment. A new button called „Payment Agreement” to trigger the payment agreement request has been added to the following areas on e-filing where there are outstanding debts: „This is usually done in the form of equal monthly payments for a certain period of time until the debt is repaid. The debt won`t be cancelled, but the company has more time to pay it off,” Mullins said. The payment agreement request can be triggered from one of the following locations where there are outstanding debts and only one tax claim is allowed at a time: To avoid penalties and interest, it is best to file tax returns and make payments on time.
If you are currently unable to pay your tax liability, please contact SARS immediately. In certain circumstances, we may enter into an agreement with you to defer your tax liability for a subsequent payment or for a payment by instalments. Please note the following: If your company enters into a deferral agreement with SARS and defaults, it has broken the agreement, Mullins said. SARS will treat the contract as null and void, it will reinstate penalties and interest, and the debt will be recoverable immediately, she said. o Suggest other conditions – If you select this option, you will be asked to specify the payment term and the start date of the first installment.o Cancel – If you cancel the automatic simulation, it will be rejected/deleted and you will have to start the process from the beginning if you want to request a payment agreement.o Save – If you select this option, the simulation will be saved and you will be able to see the simulation later, o Accept the Terms – By selecting this option, you accept the automatically simulated payment agreement plan and declare that you have read and understood the Agreement. The „Accept Terms” button will be disabled until you have confirmed the „Contract Details”. A distinction must be made between the request for a deferral of payment and a compromise on a tax liability due. Part D of Chapter 10 of the TAA deals with the deferral of payments (instalments) and Part D of Chapter 14 of the TAA deals with compromise agreements. A compromise, on the other hand, is an agreement in which SARS reimburses some or all of the tax payable by the taxpayer, the tax expert pointed out. Can`t afford to pay all your tax or VAT debts in one payment? Do you have sleepless nights because the sheriff will knock on your door every day? Record – When you record, the simulation is saved and you can view it later (before midnight). The simulation is only recorded until midnight, so if the payment agreement request is not completed by midnight, the simulation is ignored and a new simulation is required.
The taxpayer is considered tax compliant in both agreements and receives a certificate of own tax uncertainty if necessary, Mullins said. Is there an article in VAT or any other law that prohibits the seller from entering into a payment agreement with SARS while dealing with the dispute? SARS e-filing has been enhanced with functionality that allows taxpayers to request deferred payment arrangements and recently published a 25-page guide to assist taxpayers in this process. „This only happens in very unusual circumstances. If only part of the debt is cancelled, the balance due to SARS will still have to be settled, perhaps under a deferral agreement. A compromise agreement is only reached if a taxpayer is in a bad situation and has no alternative. If an agreement is reached, SARS usually waives penalties and interest. „Neither the request for a payment agreement nor the request for a compromise agreement requires that all disputes with SARS be resolved, although SARS may order this as a condition of seeking appropriate redress (which SARS would generally not do). In the event of an ongoing opposition and appeal procedure, the taxpayer may request the SARS that the payment of the disputed tax be suspended until the outcome of the dispute. This request should not prevent the taxpayer from requesting other relief measures available within the meaning of a tax law or the TAA in respect of other SARS-related amounts. Follow the steps below to proceed with the automatically simulated payment agreement plan: Once you have successfully logged into eFiling, start the process of your payment agreement by downloading the bank statement, evaluation notice or administrative penalty notice for the corresponding period, and then selecting the „Payment Agreement” option to trigger a payment agreement. With eFiling, the functionality of the payment agreement request is limited to the following types of taxes: Suggest different conditions – If you offer different conditions, you will be asked to specify the payment term and the start date of the first installment. Review the following information posted on the automatically simulated payment agreement plan: „A deferral agreement is an agreement that a taxpayer enters into because they do not have the money, but they have to pay SARS immediately.
Instead of simply not paying and paying penalties and interest – or even jail time – they sign an agreement with SARS to extend the payment deadline. The ongoing dispute should not prevent the taxpayer from requesting deferred payments or a tax compromise in respect of amounts unrelated to the dispute(s). The primary intent of a deferral is to create temporary relief if the taxpayer`s financial situation does not allow for immediate payment. It is therefore only an option if one can expect an improvement in the taxpayer`s financial situation. The payment agreement application can only be made for one type of fee at a time and not for several types of fees in a single payment request. As usual, the user must log in to the SARS eFiling website and access eFiling, where unpaid debts exist against an evaluated return, to trigger the payment agreement request. Once a payment agreement request has been initiated, eFiling presents the automatically simulated payment plan to accept, save, cancel, or offer various terms. Once you have selected the Payment Agreement button wherever there are outstanding debts, you will be presented with the screen to select the types of tax. Accept – If you accept the simulation, you declare that you have read and understood the agreement by checking the box, and then it will check if any documents are required. SARS has two mechanisms for individuals and businesses that cannot pay the amount they owe: a deferred payment agreement and a compromise.
Please note that filing a tax return without making the required payment within the meaning of Article 234(2)(d) in conjunction with paragraph k of the Tax Administration Act (TAA) is a criminal offence. During the payment planning process, the system generates a simulated payment schedule that goes back 6 months to the taxpayer. Article 168 of the TAA contains the criteria for a instalment payment agreement. .