CATEGORIES
- (47)Accounting & Financial Reporting
- (1)Accounting for Income Tax
- (1)Application of tax rates, s6(2) rebates
- (1)Assessed losses
- (10)Blogs
- (1)Business Advisory
- (8)Capital Gains Tax
- (1)Capital Gains Tax - Individuals Tax
- (1)Capital Gains Tax Implications of Trusts
- (2)Case study: Home office expense
- (1)Case study: Travel allowances
- (1)Company Formations
- (136)Corporate Tax
- (10)Customs and Excise
- (2)Deceased Estate
- (1)Deductions Pre-trade and prepaid expenses
- (1)Deregistration
- (2)Employer and Employee (PAYE and UIF Specific)
- (1)Estate Duty
- (1)Events / Webinars
- (11)Faculty News
- (2)Farming
- (168)Individuals Tax
- (1)Input - Customs Duty
- (3)Interest
- (18)International Tax
- (1)Nature of the rights of beneficiaries
- (1)Notional input tax
- (9)Payroll
- (2)Practical Payroll
- (2)Provisional tax (Link with other Taxes)
- (4)SARS Issues
- (156)Tax Administration
- (2)Tax Administration Part 2B: Resolving Problems with SARS using the Tax Ombud
- (1)Tax Administration Part 3B Dispute Resolution - Objection and appeal
- (3)Tax Dispute Resolution
- (1)Tax Opinions
- (3)Tax Update
- (1)Tax implications of loans to trusts
- (1)Tax residence
- (1)Tax returns and payments
- (3)Transfer-Pricing
- (1)Trust Income / Gain Allocations
- (1)Trust types and income allocations
- (10)Trusts
- (84)VAT
- (3)VAT periods
- (1)Wear and tear allowances
- (13)Wills, Estates & Succession
- (1)Zero Rated
- (2)eFiling
- Show All
Charging of Contingency Fees
- 02 November 2023
- Tax Administration
- SARS
Tax practitioners’ fees for work they undertake on behalf of a client must be proportional to the nature and complexity of the task. In consultation with Recognised Controlling Bodies (RCBs), SARS has updated the criteria for the recognition of controlling bodies and the registration of tax practitioners. These criteria include rules on charging contingency fees. A contingency fee is a fee that a tax practitioner charges a taxpayer based on the percentage of a refund the taxpayer will receive or the percentage of a reduction of the taxpayer’s tax liability. To protect the interests of taxpayers and prevent revenue loss to fiscus, SARS wishes to clarify that:
- The charging of a contingency fee for completing or correcting tax returns is not an acceptable form of remuneration for tax practitioners.
- The charging of a contingency fee is acceptable:
- when there is a dispute between the taxpayer and SARS under Chapter 9 of the TA Act, and
- when the taxpayer brings an application for SARS to review its decisions under section 9 of the TA Act.
Note:
- Charging of contingency fees for submission of tax returns has been forbidden since 2013.
- Charging of contingency fees is not allowed for correcting tax returns from 14 September 2023.
Where contingency fees are allowed, the tax practitioner must enter into a written agreement with his/her client. The agreement should contain sufficient information on:
- The details of the tax practitioner and the taxpayer,
- The outcome upon which the contingency fees are based and its percentage,
- The consequences if the outcome is not achieved, and
- When the contingency fees are charged.
The agreement should also contain a clause that gives:
- The taxpayer client has the right to refer the agreement to the relevant RCB for review, and
- The RCB has the authority to set aside any provision of the agreement or any fees claimable in terms of the agreement if the RCB finds such provision or fees unreasonable or unjust.
Source: SARS