When taxpayers are aggrieved by an assessment or not satisfied with a decision taken by SARS, and if the decision is subject to objection and appeal, they have a right to dispute the assessment or decision. Chapter 9 of the Tax Administration Act, 2011, and the rules made under section 103 provide the legal framework for these disputes across all tax types found in the various tax acts administered by SARS, excluding the Customs and Excise acts. The dispute resolution rules are made by the Minister of Finance and are of equal status to regulations and similar subordinate legislation.
Tax appeals are heard either by the Tax Board or the Tax Court.
Tax Board
The Tax Board is established by the Minister of Finance under section 108 of the Tax Administration Act. It is not a court as referred to in Section 166 of the Constitution but an administrative tribunal created under the Tax Administration Act. The Tax Board hears tax appeals involving tax in dispute that do not exceed the amount determined by the Minister under section 109(1)(a) of the Tax Administration Act, 2011. This amount has been increased to R1 000 000 with effect from 1 January 2016.
The taxpayer and SARS must also agree that a matter be heard by the Tax Board. If the taxpayer or SARS is not satisfied with the decision of the Tax Board, the taxpayer or SARS may request that the matter be heard de novo by the Tax Court. This is not an appeal against the decision of the Tax Board, but a completely new trial. The sittings of the Tax Board are not public, and the Board’s decisions are not published by SARS. The decisions of the Tax Board are binding on the parties but have no precedent value.
Contact details and addresses for the offices of the Clerk of the Tax Board can be accessed under Institution of Legal Proceedings here: https://www.sars.gov.za/legal-counsel/dispute-resolution-judgments/institution-of-legal-proceedings/
Tax Court
The Tax Court is established by the President of the Republic under section 116 of the Tax Administration Act, 2011. The Tax Court has jurisdiction over tax appeals lodged under section 103 of the Tax Administration Act and may also hear interlocutory applications and procedural matters relating to objections and appeals.
The procedures of the Tax Court are regulated both under Chapter 9 of the Tax Administration Act and the rules issued under Section 103. You can access the Notice in relation to the addresses where documents, notices or requests are to be delivered here: Public Notice 3135 (GG 48187 of 10 March 2023) https://www.sars.gov.za/wp-content/uploads/Legal/SecLegis/Legal-LSec-TAdm-PN-2023-01-Notice-3135-GG-48187-Address-at-which-notice-to-be-delivered-ito-rule-23-of-DR-Rules-10-March-2023.pdf
Delivery of a notice of objection under Rule 7
There are two different procedures, depending on the type of tax.
- For personal tax and corporate income tax, delivery must be made by means of the taxpayer’s electronic filing page or, if applicable, by post to any of the addresses listed below by handing it in to SARS at any SARS branch office.
- For value-added tax, employee tax (PAYE) or other taxes, delivery must be made to any of the addresses listed on the page for Institution of Legal Proceedings by handing it in to SARS at any SARS branch office found here. https://www.sars.gov.za/legal-counsel/dispute-resolution-judgments/institution-of-legal-proceedings/
Delivery of any document or notice or making a request relating to the dispute process after delivery of a notice of appeal or an application in terms of Part F of the Rules can be delivered to a physical address at “Tax Court Litigation, Khanyisa Building – First Floor, 271 Bronkhorst Street, Nieuw Muckleneuk” in Pretoria or via email address “taxcourtlitigation@sars.gov.za”.
Rule 3(1) read with Rule 2(1)(c)(iii) – Registrar of the Tax Court
The Tax Court hears tax appeals involving tax disputes in terms of section 103 of the Tax Administration Act, 2011. These appeals would have either been dealt with first at a SARS branch or the Tax Board or been through the ADR process in terms of Rule 13 of the Tax Court Rules. Once the Notice to Appeal has been lodged by the taxpayer, then SARS must initiate the process in terms of Rule 31, and several pleadings are exchanged between the parties and documents discovered before it is ripe for hearing at the Tax Court.
All documents, notices or requests intended for the Registrar of the Tax Court must be delivered at this address: “Tax Court Litigation, Khanyisa Building – First Floor, 271 Bronkhorst Street, Nieuw Muckleneuk” in Pretoria or via the email address “taxcourtlitigation@sars.gov.za”.
The sittings of the Tax Court are generally not public, although the president of the Tax Court may, in exceptional circumstances, on application by any person, allow a sitting to be public. The Tax Court consists of a judge of the High Court as well as an accountant member and a commercial member selected from a panel of members appointed by the President of the Republic.
The Tax Court may also, in matters involving more than R50 million in tax in dispute and with the approval of the Judge-President of the jurisdiction within which the Tax Court sits, consist of three judges of the High Court and the two members. The judgements of the Tax Court must be published for general information, but if the sitting was not public, it must be in a form that does not reveal the taxpayer’s identity.
A taxpayer or SARS may appeal against the Tax Court’s judgement to the full bench of the Provincial Division of the High Court or to the Supreme Court of Appeal (SCA) if the president of the Tax Court on request allows a direct appeal to the SCA. An appeal heard by the full bench may be further appealed to the SCA.
The judgements of the Tax Court are not binding on other courts but only on the parties. However, the judgements of the Tax Court are of persuasive value in other tax courts, the high courts and the SCA.
High Courts
The High Courts, which have previously been called “the Supreme Courtsâ€, are spread throughout South Africa and are regulated by the Superior Courts Act, 2013. They have jurisdiction over the defined provincial areas in which they are situated and over all persons residing or present in that area. These courts hear matters that are of such a serious nature that the lower courts would not be competent to make an appropriate judgement or to impose a penalty in that regard, as well as matters referred to them by law.
Under section 133 of the Tax Administration Act, a taxpayer or SARS may appeal against the Tax Court’s judgement to the full bench of the High Court, which has jurisdiction in the area in which the Tax Court sitting is held. The sittings of the High Courts are public, and their judgements are published for general information.
The judgements of the High Court are binding on all lower courts and tribunals and of persuasive value in other High Courts and higher courts such as the SCA and the Constitutional Court.
Supreme Court of Appeal (SCA)
The SCA is seated in Bloemfontein and is the highest court in South Africa, except for constitutional matters. It generally only deals with cases referred from the High Court, but statutory provision is made in section 133 of the Tax Administration Act for direct access from the Tax Court. The sittings of the SCA are public, and its judgements are published for general information. The judgements of the SCA are binding on all lower courts and tribunals, and, except for the Constitutional Court, no other court can overturn a decision of the SCA.
Constitutional Court
The Constitutional is the highest court in all constitutional matters. It is the only court that may adjudicate disputes between organs of state in the national or provincial sphere of government concerning the constitutional status, powers or functions of any of those organs of state or that may decide on the constitutionality of any amendment to the Constitution or any parliamentary or provincial Bill. The Constitutional Court makes the final decision on whether an Act of Parliament, a provincial Act or the conduct of the President is constitutional. In the context of tax appeals, it has a limited jurisdiction to review an SCA judgement dealing with a tax appeal.
Legislative references in this article
Tax Administration Act, No. 28 of 2011
SECTION 9
“9. Decision or notice by SARS.
(1) A decision made by a SARS official or a notice to a specific person issued by SARS under a tax Act, excluding a decision given effect to in an assessment or a notice of assessment that is subject to objection and appeal, may in the discretion of a SARS official described in paragraph (a), (b) or (c) or at the request of the relevant person, be withdrawn or amended by:
(a) the SARS official;
(b) a SARS official to whom the SARS official reports; or
(c) a senior SARS official.
(2) If all the material facts were known to the SARS official at the time the decision was made, a decision or notice referred to in subsection (1) may not be withdrawn or amended with retrospective effect after three years from the later of the:
(a) date of the written notice of that decision; or
(b) date of assessment or the notice of assessment giving effect to the decision (if applicable).
(3) A decision made by a SARS official or a notice to a specific person issued by SARS under a tax Act is regarded as made by a SARS official authorised to do so or duly issued by SARS, until proven to the contrary.”
SECTION 103
“Rules for dispute resolution.
(1) The Minister may, after consultation with the Minister of Justice and Constitutional Development, by public notice make ‘rules’ governing the procedures to lodge an objection and appeal against an assessment or ‘decision’ and the conduct and hearing of an appeal before a tax board or tax court.
(2) The ‘rules’ may provide for alternative dispute resolution procedures under which SARS and the person aggrieved by an assessment or ‘decision’ may resolve a dispute.
(3) The Commissioner may prescribe the form of a document required to be completed and delivered under the ‘rules’.”
SECTION 107
“Appeal against assessment or decision.
(1) After delivery of the notice of the decision referred to in section 106 (4), a taxpayer objecting to an assessment or ‘decision’ may appeal against the assessment or ‘decision’ to the tax board or tax court in the manner, under the terms and within the period prescribed in this Act and the ‘rules’.
(2) A senior SARS official may extend the period within which an appeal must be lodged for:
(a) 21 business days, if satisfied that reasonable grounds exist for the delay; or
(b) up to 45 business days, if exceptional circumstances exist that justify an extension beyond 21 business days.”
(3) A notice of appeal that does not satisfy the requirements of subsection (1) is not valid.
(4) If an assessment or ‘decision’ has been altered under section 106 (3), the assessment or ‘decision’ as altered is the assessment or ‘decision’ against which the appeal is noted.
(5) By mutual agreement, SARS and the taxpayer making the appeal may attempt to resolve the dispute through alternative dispute resolution under procedures specified in the ‘rules’.
(6) Proceedings on the appeal are suspended while the alternative dispute resolution procedure is ongoing.
(7) SARS may concede an appeal in whole or in part before:
(a) the matter is heard by the tax board or the tax court; or
(b) an appeal against a judgement of the tax court or higher court is heard.”
SECTION 109
“Jurisdiction of tax board.
(1) An appeal against an assessment or ‘decision’ must, in the first instance, be heard by a tax board if the tax in dispute does not exceed the amount the Minister determines by public notice, unless a senior SARS official and the ‘appellant’ agree that the matter be heard by the tax court.
(2) SARS must designate the places where tax boards hear appeals.
(3) The tax board must hear an appeal at the place referred to in subsection (2) which is closest to the ‘appellant’s’ residence or place of business, unless the ‘appellant’ and SARS agree that the appeal be heard at another place.
(4) In making a decision under subsection (1), a senior SARS official must consider whether the grounds of the dispute or legal principles related to the appeal should rather be heard by the tax court.
(5) If the chairperson prior to or during the hearing, considering the grounds of the dispute or the legal principles related to the appeal, believes that the appeal should be heard by the tax court rather than the tax board, the chairperson may direct that the appeal be set down for hearing de novo before the tax court.”
Useful links for the reader
https://www.sars.gov.za/wp-content/html5forms/ADR1/index.html Notice of OBJECTION for Trusts and Other Taxes
https://www.sars.gov.za/wp-content/html5forms/ADR2/index.html Notice of APPEAL for Trusts and Other Taxes