SARS “freeze” period from 16 December to 15 January
Section 1 of the Tax Administration Act No 28 of 2011, (the TA Act), defines a “business day” to mean a day which is not a Saturday, Sunday or public holiday, and for the purposes of determining the days or a period allowed for complying with the provisions of Chapter 9, excludes the days between 16 December of each year and 15 January of the following year, both days inclusive.
There is no definition of a “day” in the Income Tax Act No 58 of 1962, (the Act), or the TA Act, while a “business day” is defined in the TA Act. Various Tax Acts require Taxpayers and Tax Practitioners to take actions within a certain specified period. Strict compliance with those periods is necessary in order to avoid any adverse tax consequences. Normally, the legislation is clear on whether or not a “business day”, should be used when these periods are calculated. Unfortunately, there is still some confusion as to whether or not a “business day” should be used, since some correspondences received from the South African Revenue Service, (SARS), still refer to “days”.
Some guidance is given in the Short Guide to the Tax Administration Act, 2011, (Act No.28 of 2011), version 3, (the Guide). The Guide explains how the TA Act will use a “business day” in the context of the various time periods, as follow:
The TA Act generally uses business days in the context of time periods for registration, submission of returns or requested relevant material and calendar days in the context of time periods for payment of tax or calculation of interest
The Rules Promulgated under section 103 of the TA Act, prescribing the procedures to be followed when lodging an objection and appeal against an assessment or a decision subject to objection and appeal, (the Rules), does refer to a “day”. However, the definition of a “day” in the Rules, refer to a “business day” as defined in section 1 of the TA Act. This is important, since the “freeze” period, contained in the definition of a “business day” in section 1 of the TA Act, i.e the period between 16 December and 15 January, only apply to the provisions of Chapter 9 of the TA Act, i.e dispute resolution. This period is referred to as dies non.
It is also important to note that the Comprehensive Guide to Advance Tax Rulings, (ATR Guide), has a definition of a “business day”. According to the definition of a “business day” in the ATR Guide, the “freeze period” which apply to the provisions of Chapter 9 will also apply from the date a completed application in terms of section 79 of the TA Act is submitted. This means that an applicant should exclude the days from 16 December to 15 January, (both days included). The “freeze period” will also apply to all applications that are in progress during the period.
10/12/2021
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