SARS won’t consider your tax debt compromise application in these instances

Simangele Mzizi, Fsp Business, 26 Sep. 2014

Tags: tax compromise, tax debt compromise, sars

If you or your business owes SARS more money than you can afford to pay, a tax debt compromise could just save your financial life.

A tax debt compromise is a request to SARS asking it to “park” your outstanding tax debt if you’re in financial distress.

If SARS agrees to park your debt, it won’t demand payment and it will treat your debt as no longer due and payable.

But, before you start a tax compromise application, it’s important to note when SARS won’t even look at your application.

Take a look below at the instances when SARS won’t consider a tax debt compromise.

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Here are the instances when SARS wont consider a tax debt compromise

According to the Practical Tax Loose Leaf Service, SARS won’t consider a tax debt compromise if:
  • You’ve already applied for (and were granted) a tax compromise within the last three years from the date of your application;
  • Your tax affairs aren’t up to date;
  • You’re already being sequestrated or liquidated by another creditor;
  • The compromise could prejudice other creditors (unless the creditors consent to the compromise);
  • The compromise could benefit other creditors relative to SARS; and
  • The compromise could affect a broad range of taxpayer compliance. For example, SARS decides to overlook the fact you’re a terrible taxpayer as you haven’t submitted a tax return since 1984. If it shows leniency to you, all other compliant taxpayers could see this as SARS being very lenient and not submit their returns either – because SARS will just compromise the tax debt.

Is there anything you can do to make SARS consider your tax debt compromise application?



You can help SARS tick off all of these points by giving it sufficient and appropriate information.

Check out the Practical Tax Loose Leaf Service for more on preparing for a tax compromise.

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