Dealing with tax return corrections and voluntary disclosure

Dealing with tax return corrections and voluntary disclosure

• 16 March 2023
• Tax Administration
• Herman van Dyk

Request For Correction (RFC)

Preparers of tax returns (declarations) are required to provide various manual inputs of data and it is entirely plausible that clerical errors may occur in the process. Where possible, it is advisable that a second person performs an independent check of the completed return before submission. After submission, it is important that the notice of assessment be thoroughly scrutinised to ensure that it is in line with the expected results of the submission.

If the preparer of a tax return realises that an error has been made, the Request for Correction (RFC) process allows for the correction of a previously submitted return. This option is available on the relevant tax work page (accessed by navigating to Returns History) on the SARS eFiling platform. 

The RFC will not be available where an audit or verification case was completed, or if a revised declaration was done by SARS. The RFC is also not available to increase input tax on a VAT201 return (in such case, the further input tax deduction must be claimed in a subsequent VAT period).

Where a preparer of a return has completed the return correctly but is not in agreement with the assessment made by SARS, the preparer must lodge an objection (which can be preceded by requesting reasons for the assessment).

Voluntary disclosure

Chapter 16 (Part B) of the Tax Administration Act has made the Voluntary Disclosure Programme (VDP) a permanent feature of the South African tax system. The VDP encourages taxpayers in default to come forward on a voluntary basis to regularise their tax affairs with SARS and to avoid the imposition of penalties and even criminal prosecution for a tax offence arising from the default. A 'default' mean the submission of inaccurate or incomplete information to SARS, or the failure to submit information or the adoption of a tax position, where such submission, non-submission, or adoption resulted in an understatement.

VDP applications are only accepted for disclosures that are voluntary. This means that the disclosure must be made of the taxpayer's own volition and that SARS must have no prior knowledge of the default. This was emphasised by the Supreme Court of Appeal (SCA) in Purveyors South Africa Mine Services (Pty) Ltd v C:SARS where it was held that the VDP application must be made in the prescribed form and manner and that where a taxpayer "tests the water" by informally disclosing the default to SARS, the taxpayer would be precluded from subsequently applying for voluntary disclosure relief because the disclosure is no longer voluntary.

The prescribed form and manner for the VDP is to complete the VDP01 application form on SARS eFiling. The application will then be evaluated and if successful, a VDP agreement is provided to the applicant for consideration and signature.

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