ARTICLE
5 October 2021

Tax Season: What You Need To Know About The Third Party Process

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SchoemanLaw Inc.

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SchoemanLaw Inc Attorneys, Conveyancers and Notaries Public, based in Cape Town, is a boutique law firm offering its clients access to high quality online legal documents and agreements, together with a wide range of legal services. The firm has an innovative and entrepreneurial mind-set that distinguishes it from other law firms. We apply our first-hand understanding of the challenges facing entrepreneurs (regardless of their business size) to develop proven, practical solutions incorporating legal compliance, risk aversion and business sense. We achieve this by offering clients tailored, yet holistic support comprising of legal gap analysis, the construction of tailored legal solutions and the practical implementation thereof through training and automation.
With the tax season currently underway in South Africa, here's all you need to know about the Third Party Appointment process and how it could affect you.
South Africa Tax

With the tax season currently underway in South Africa, here's all you need to know about the Third Party Appointment process and how it could affect you. 

In terms of the Tax Administration Act, the Commissioner is empowered to request that a third party pay off any outstanding tax debts which a taxpayer is liable for.  

This means that instead of SARS claiming the outstanding amount directly from the taxpayer, the Commissioner may instead recover the money from the Third Party on behalf of the taxpayer. The Third Party can be anyone who is currently holding monies or property on behalf of the taxpayer. Examples of such parties include employers and banks. 

The Third Party process therefore means that if a taxpayer does not respond to SARS' demand to settle an outstanding tax bill, SARS will then be entitled to claim the payment of that debt from the Third Party without the taxpayer's consent and the third party will be obligated to pay-off of the debt. If the Third Party fails to settle the debt upon notification, then they may be held personally liable thereto. 

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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