SARS requires proof of payment for vehicle as an audit query that is bought in 2013, is this standard practice? Other inquiry can you deduct if you pay your child’s study loan out of your pocket, or education at an accredited institute?
Important:
This answer is based on tax law for the tax year ending 28 February 2020.
Answer:
We accept, for purposes of the guidance that you require guidance with respect to the reduction of the allowance that is done under section 8(1)(b) of the Income Tax Act. It is not clear if this reduction will be based this on the basis of ‘accurate data furnished’ – see section 8(1)(b)(iii) or on the rate per kilometre determined by the Minister in the Gazette.
SARS is entitled to request the documents relevant to the lease or acquisition of the vehicle in question, because this is, we submit, ‘relevant material’ as defined in the Tax Administration Act. The fact that SARS hasn’t requested this previously, is irrelevant. In the ITR12, the taxpayer specifically declared that he or she has “the necessary receipts and records to support all my declarations on this form which I will retain for inspection purposes”.
In terms of section 29(3) of the Tax Administration Act, “records, books of account or documents need not be retained by the person described in—
(a) subsection (2) (a), after a period of five years from the date of the submission of the returnÍž and
(b) subsection (2) (c), after a period of five years from the end of the relevant tax period.”