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Tax administration Act 2011

01BThe following are extracts from the SHORT GUIDE TO THE TAX ADMINISTRATION ACT, 2011  regarding records that are to be kept in terms of the Act.

Record retention:

The duty to keep records.

This Act imposes a duty on a person to retain the records, books of account or documents needed to comply with a tax Act. It is important to note that certain taxpayers, for example employers and vendors, are required to keep additional specific records in terms of the relevant tax Acts.

In what form must records be kept?

Regarding the manner of keeping records, a new requirement is added. This is to ensure the orderly and safe retention of the records and efficient access thereto by SARS, for purposes of an inspection or audit, during the prescribed retention period. To ensure that records are kept in the correct form, provision is made that SARS may inspect the records for this purpose, in addition to an examination, audit or investigation under the Act.

A person obliged to keep records must:

  1. Keep the records in:
    • Their original form;
    • The form generally prescribed by the Commissioner by public notice; or
    • The form authorised by a senior SARS official upon request by a specific taxpayer for the retention of information contained inrecords or documents by that taxpayer in a different but acceptable form;
  2. In an orderly fashion;
  3. In a safe place; and
  4. Open for inspection, audit or investigation by SARS.

SARS can do an unannounced inspection to ensure that the records that have to be retained are actually retained and a taxpayer has the duty to keep the necessary records open for inspection by SARS in South Africa.

For what period must records be retained for?

The periods for which persons are required to keep records are set out in Table 3.

Table 3: Record retention periods.

Person Period
A person who has submitted a return From the date of the submission of the return until the last day of a period of five years
A person who is required to submit a return for the tax period and has not submitted a return Indefinite, until a return is submitted, as from when the period of five years applies
A person who is not required to submit a return but has, during the tax period, received income, has a capital gain or loss or engaged in any other activity that is subject to tax or would be subject to tax but for the application of a threshold or exemption Until the audit is concluded or the applicable five year period, whichever is the latest
A person who has been notified or is aware that the records are subject to an audit or investigation. If required to submit return: Date of submitting returnIf not required to submit return but received income: End of the tax periodIf failed to submit return: End of the tax period
A person who has lodged an objection or appeal against an assessment or decision under this Act. Until the disputed assessment or decision becomes final or the applicable five year period, whichever is the latest

This article is a general information sheet and should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice.

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