I have a client who is currently owing SARS R75,000.00. Due to the COVID-19 pandemic, he is not in the position to pay this amount. He is willing to make a payment plan of R1,500.00 per month in order to settle this. How long does SARS allow you to pay of
Author: Cecile Bothe
Important:
This answer is based on tax law year ending 28 February 2021.
Answer:
Any outstanding debt queries and deferred arrangements requests may be sent to the following email addresses:
o Debt1@sars.gov.za for Alberton branch (including Nigel, Germiston, Brakpan, Boksburg, Benoni, Vereeniging and Springs)
o Debt2@sars.gov.za for Pretoria, Limpopo and North West Provinces
o Debt3@sars.gov.za for KwaZulu Natal and Eastern Cape Provinces
o Debt4@sars.gov.za for Western Cape, Northern Cape and Free-State Provinces
o Debt5@sars.gov.za for Megawatt Park (Including Johannesburg, Roodepoort, Randfontein and Krugersdorp)
SARS provides for a deferment, or instalment payment arrangement for outstanding tax debt, if you are unable to settle the amount in one payment. You may request and enter into an instalment payment arrangement with SARS. It allows you to pay your outstanding debt in one sum or in instalments over time until you have paid your entire debt including applicable interest. This agreement however would be subject to certain qualifying criteria.
Any supporting documents substantiating the financial status of the taxpayer must accompany such a request. A deferred arrangement (monthly installment, period of arrangement etc.) will depend on the specific circumstances of the taxpayer.
Once an agreement has been finalised the taxpayer will be able to request a tax clearance.
Criteria for payment arrangements
SARS may enter into a payment agreement only if:
• The taxpayer suffers from a lack of assets or liquidity which is reasonably certain to be remedied in the future;
• The taxpayer anticipates income or other receipts which can be used to satisfy the tax debt;
• Prospects of immediate collection activity are poor or uneconomical but are likely to improve in the future;
• Collection activity would be harsh in the particular case and the deferral or instalment agreement is unlikely to prejudice tax collection;
• The taxpayer provides the security as may be required;
• All outstanding returns and/or recons are submitted.
Please refer to: https://www.sars.gov.za/ClientSegments/Individuals/How-Pay/Pages/Owing-SARS-Money.aspx published on the SARS website.