25. SARS VAT Vendors Guide.pdf

Compared to the higher percentage applicable for

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compared to the higher percentage applicable for similar behaviours had the vendor not voluntarily disclosed the tax defaults. See 11.4.1 for more details on the VDP and 11.2.2 for the reduced percentages. In all other cases, a vendor may object to the USP being imposed and to request a re- classification of the behaviour or for circumstances not previously considered to be taken into account by SARS. If the objection is allowed, this may result in a reduction of the USP imposed, or a decision that no USP should be imposed in a case where the understatement results from a bona fide inadvertent error. See the Short Guide to the Tax Administration Act , 2011 for more information. 11.4.3 Remission of interest The TA Act makes provision for interest to be remitted or reduced in certain exceptional circumstances. 121 The factors which are taken into account in determining if a remission of interest may be made are different from those which must be considered regarding the remission of a non-compliance penalty or USP as discussed in 11.4.1 and 11.4.2. Before 1 April 2010, the factors which were considered in deciding whether interest could be remitted or not included those which indicated whether there was a loss to the fiscus , or if the vendor benefitted financially by not paying the VAT on time. With effect from 1 April 2010 the Commissioner’s discretion to remit interest was limited so that it is now based on whether or not the payment of tax was made within time as a result of circumstances beyond the vendor’s control. An example of this is when a vendor’s payment instruction could not be carried out by the vendor’s bank in time because of a failure in the banking system. See Interpretation Note 61 “Remission of Interest” for an explanation of the law before and after 1 April 2010. With effect from 14 October 2016, a request for remission of interest may only be made via eFiling or at a SARS branch once you have paid any tax which is due in that regard. Note that the remission of interest will only be considered where substantive reasons are given for a late payment. This means that properly motivated mitigating circumstances must be submitted for consideration together with any evidence which supports your case for the remission of interest. As all the relevant mitigating and aggravating factors must be considered by the Commissioner when making a decision in this regard, a failure to submit adequate reasons will mean that there will be no basis upon which the Commissioner will be able to exercise any discretion in the matter. The mitigating circumstances and evidence which you submit to support your case should therefore demonstrate to the Commissioner’s satisfaction that the 121 Section 187(6) of the TA Act.
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