At Nowicki and Associates, we understand the complexities involved in tax compliance, particularly for professionals who provide tax services. Staying compliant with the latest regulations is crucial for both your business and your clients. In this post, we’ll explore key points from SARS Interpretation Notice 132, issued on 29 July 2024, which offers critical guidance on the eligibility requirements for tax practitioners and the conditions under which they can be deregistered due to non-compliance.
What is SARS Interpretation Notice 132?
Interpretation Notice 132, issued by the South African Revenue Service (SARS), clarifies the conditions under which a person is not eligible to register as a tax practitioner and when SARS must deregister a tax practitioner for non-compliance. The notice explains the implications of non-compliance with tax laws, focusing on tax practitioners who have failed to meet their obligations over a certain period.
The interpretation notice refers to Section 240(3)(d) of the Tax Administration Act (TAA), which specifically deals with non-compliance concerning tax debts and unfiled returns. It outlines a step-by-step process for determining whether a tax practitioner is compliant, and if not, what steps SARS will take to deregister them.
Key Compliance Conditions for Tax Practitioners
Under Interpretation Notice 132, SARS identifies two major conditions that affect a tax practitioner’s registration status:
- Non-Compliance for an Aggregate of Six Months: A tax practitioner who has been non-compliant for at least six months in the preceding 12-month period risks deregistration. This non-compliance could be due to outstanding tax returns, unpaid taxes, or failure to register for tax as required.
- Failure to Remedy Non-Compliance: If SARS issues a notice of non-compliance, the practitioner must resolve the issue within a reasonable time frame. Failure to do so will trigger the second condition for deregistration.
The notice emphasizes the importance of addressing any non-compliance immediately to avoid the potential loss of business and professional standing.
Understanding the Impact of Deregistration
Deregistration can severely impact a tax practitioner’s ability to operate, affecting both their livelihood and the clients they serve. It is critical to remain compliant to avoid this outcome. The notice also highlights that reinstatement is possible once compliance is demonstrated, but this can take time, leading to further business disruption.
Conclusion
SARS Interpretation Notice 132 serves as an important reminder for tax practitioners to maintain continuous tax compliance. At Nowicki and Associates, we encourage all practitioners to stay updated on their compliance obligations to avoid the serious consequences of deregistration.