Tax Refunds

A taxpayer was assessed to a refund (corporate income tax) in respect of its 2017 year of assessment in the amount of roughly R8m and in respect of its 2018 year of assessment in the amount of roughly R6m. The 2018 year of assessment was under audit. The 2017 refund came about in a reduced assessment consequent upon a successful dispute process. SARS refused to release the 2017 refund on the basis of the 2018 audit. The taxpayer formally requested the 2017 refund. This was rejected by SARS on the basis of the ongoing 2018 audit.

The approach adopted and which resulted in payment by SARS not only of the 2017 refund but also (for some reason) the 2018 refund (despite the fact that the audit was still ongoing at the time and despite the fact no request was made for payment of this refund) was to launch a formal review application of SARS’ decision not to pay the refund, putting SARS to terms – five days. The review application was seemingly ignored. We subsequently launched a High Court application in pursuit of the refund. The matter never proceeded to trial. SARS conceded and paid the refund.

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