Many taxpayers continue to be frustrated with SARS due to delayed refunds. This seems to be a common occurrence and can be devastating to the cash flow of taxpayers and can even threaten the survival of their businesses. The impact thereof is particularly felt by taxpayers with regular refunds or instances where large expenses are incurred in respect of capital projects and/or initial start-up costs of a new business.
It is important to note that in terms of the Tax Administration Act, 2011 ("TAA") SARS need not authorize a refund until a verification or audit has been finalized. Taxpayers should therefore be proactive in managing this process by ensuring that they are able to provide all the information that SARS may potentially require to complete the verification without delay. It is advisable to identify, verify and compile all relevant and supporting information before, or at the time that the return is submitted as this will assist in expediting the verification process in the case of a delayed VAT refund.
Other aspects which may cause a delay in taxpayers obtaining a VAT refund from SARS are as follows:
Incorrect details including contact details of the Representative Vendor - Taxpayers should ensure that these details are up to date should SARS attempt to contact them or if they wish to engage SARS;
Taxpayers being unaware of a verification or audit - It is advisable that taxpayers regularly check on SARS’ e-filling platform that they have not received any new correspondence from SARS;
Any outstanding VAT returns and the incorrect banking details registered with SARS.
Once a verification or audit is completed SARS may allocate a refund against outstanding VAT and/or certain other outstanding taxes (i.e., SARS may set off a VAT refund against outstanding corporate income tax, etc.).
Where SARS still fails to meet its obligation to pay VAT refunds and related interest due timeously, taxpayers are advised to seek assistance from a tax professional. Contact VAT IT SA today for assistance in this regard. Our trusted VAT experts have assisted numerous clients to recover delayed refunds fast and efficiently.
Article by:
Nico Grobler
Senior VAT Manager
VAT IT SA
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