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VAT – Estimated Assessments enforced by SARS

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On 11 December 2023 SARS issued a notice which states that a new automated VAT assessment system have been implemented. This system enables SARS to raise an estimated VAT assessment in terms of the Tax Administration Act, should a VAT vendor fail to provide the relevant documentation as requested during the VAT verification process. SARS also provided specific details on what the process will entail, with important limitations to note (below as per the SARS notice):

  • The details of the estimated assessment can be viewed on the notice (VAT217) issued to the vendor.
  • A Request for Correction will not be allowed if SARS has raised an estimated assessment for VAT in the same period.
  • If the vendor does not agree with the estimated assessment, the required relevant material must be submitted within 40 business days from the date of the VAT217 notice that was issued.
  • The vendor can submit the outstanding relevant material via eFiling, at a SARS branch or through the SARS Online Query System (SOQS).
  • The vendor may Request for Extension if the relevant material cannot be submitted within 40 business days (with further conditions met).
  • If the Request for Extension is approved, new timelines will apply.
  • The vendor will be allowed to submit a Request for Suspension of Payment if the estimated assessment results in an amount payable for the period stipulated in the VAT217 notice issued (provided certain circumstances are met).
  • The vendor will not be allowed to submit a Notice of Objection (NOO) as an estimated assessment issued in terms of section 95(1)(c) is not subject to dispute.
    • We believe that if the vendor provides the supporting documentation to SARS and the assessment is not revised, the taxpayer is entitled to object.

The above steps taken by SARS again just highlights the importance of meeting the requirements. We urge all clients to ensure that all VAT requests are attended to timeously to ensure deadlines and timeframes are met. Specifically also with regards to the provision of supporting documentation, ensuring the above estimation process is not required to be activated by SARS.

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