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Best Practice: SARS Income Tax Audit 2021

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Overview

In the 2021/2022 Budget Speech delivered on 24 February 2021, the Minister of Finance, Tito Mboweni, stated: “We owe a lot of people a lot of money. We must shore up our fiscal position in order to pay back the massive obligations we have incurred over the years.”

The minister also pointed out the following, “SARS has started to deepen its technology, data and machine learning capability. It is also expanding specialised audit and investigative skills in the tax and customs areas to renew its focus on the abuse of transfer pricing, tax base erosion and tax crime.”

Given government’s focus on cash collections aimed at serving the ever-increasing debt burden of the country, one should expect a significant increase in SARS audits and investigations.

The tax practitioner and tax executive has an obligation towards clients and employers to ensure that these audits can be dealt with effectively and efficiently whilst minimising the risk of revised assessments and by eliminating the risk of understatement penalties charged by SARS.

This not to be missed workshop-webinar is relevant for any person who is responsible for ITR14 submissions and responding to SARS audits and requests for information. It will also be insightful for any public officer or director responsible for overall tax governance of a taxpayer.

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Workshop-webinar content

The workshop-webinar will consist of the following four aspects:

Section 1           

Since September 2018, 15 income tax cases were heard in the Supreme Court of Appeal (SCA). Of the 15 cases, only three were found in favour of the taxpayer. In this section, we will explore certain high-profile SCA and high court cases and consider whether or not a different approach by the taxpayer (in dealing with the SARS request for information and the SARS audit) could have avoided the cases being referred to the court in the first instance. Cases dealing with prepayments, stock valuations and section 24C will inter alia be discussed.

Section 2           

Under section 2, we will consider how a precautionary and anticipatory approach to ITR14 preparation can avoid costly disputes with SARS and minimise the risks of understatement penalties. We will further discuss sound principles of tax risk management and tax governance, which if applied properly, can protect the taxpayer against most understatement penalties.

Section 3           

Here we will deal with practical case studies where a strategy for dealing with SARS audits under different scenarios will be discussed in a practical and understandable manner. Participants will benefit from the practical experience built up over 30 years by the presenter in dealing with SARS audits. This is more than “knowing your rights”. This section is about the subjective decisions to be made by the person dealing with SARS audits under a variety of scenarios.

Section 4           

Under section 4, we will deal with the future of tax audits with specific reference to increased data analytical capabilities of SARS and reliance on third-party data submissions.

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Who should attend?

Tax practitioners, tax accountants, tax managers and tax executives.

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Presenter

Johan Heydenrych CA(SA)

Johan has specialised in taxation since 1991. He was a tax partner in KPMG from 1997 to 2020 and is currently a partner in the Kreston SA network specialising in taxation. He provides a wide range of tax services to various clients across industries. These include, but are not limited to, the following:

• Advice on tax risk management and tax governance.
• Tax compliance services including but not limited to ITR14 and IT14SD.
• Dealing with tax disputes including representing clients at alternative dispute resolution (ADR) hearings.
• Submission of documentation and revised returns under the voluntary disclosure programme.
• Issuing of tax technical opinions on income tax, value-added tax (VAT) and PAYE. This includes preparing briefs to senior counsel and submissions of requests for binding opinions from SARS.
• Audit support services including normal tax and deferred tax disclosure and disclosure of uncertain tax positions.
• Assistance with implementation of tax reporting for new accounting standards such as IFRIC 23, IFRS 9, IFRS 15 and IFRS 16.
• Facilitation of tax diagnostic sessions with existing and prospective clients.
• Advice on mergers, acquisitions and reorganizations.
• Tax due diligences
• Advice on tax implications of recapitalization transactions, debt restructures, liquidations and de-registrations.

Johan has been a regular presenter for The Tax Faculty over the past five years. In 2020, he presented webinars on tax risk management, Covid-19 relief, ITR14 preparation, dispute resolution, value-added tax and tax and business rescue. He also prepared several practical case studies for the Professional Certificate in Tax Opinion and Dispute Writing course presented by the Tax Faculty.

Education and qualifications

• BCom (Accounting), Cum Laude.
• BCom (Accounting Hons), Cum Laude (Award: Best student in Audit 700).
• Certificate in the Theory of Accounting.
• MCom (Taxation), Cum Laude, (Award: Best MCom [Tax] student).
• Chartered Accountant (specialising in taxation).
• Member of SAICA.
• Registered tax practitioner.

 

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CPD

This event and successful completion of the online assessment will secure 4 hours verifiable output Tax CPD points.