SARS VAT Refund

This document explains our endorsed mechanism to facilitate the safe receipt of overdue refunds from the South African Revenue Service (SARS), beginning with a complaint being lodged and concluding with receipt of refund. It has been written in a question-and-answer format for easier understanding.

With whom would Van Dyk Attorneys lodge the complaint?

The Office of the Tax Ombud (the Ombud).

At which point in time can one complain to the Ombud?

Returns which reflect refunds are almost always selected for verification. Once all requested documents has been supplied, SARS has twenty-one days to complete their verification. Complaint may be lodged with the Ombud from the next business day.

On this next day or any day thereafter, we encourage for complaint to be lodged with the Ombud over SARS. Although acceptable, even appropriate in some cases to complain rather to SARS, receipt is likely to come later than for Ombud. You cannot complain to both at the same time.

What must submission include when lodging complaint?

We complete a prescribed complaints form on your behalf, in completing we may ask for minor items such as a Power of Attorney or a clearer ID.

The form includes responses that are clear, concise and informed. Responses specific to the situation are relayed too. Special reference is made to Ombud-released publications. The harm caused by the delay is worded sensitively and appropriately. These details have been well received.

We request supporting documentation for the tax period in which the refund falls. Request usually includes the following items:

• Statement of Account

• Return

• Workings / Schedules

• Verification Letter

• Other information special to case

Clear and complete information packs greatly assist in shortening processing times.

What is the process post lodging of complaint?

We usually receive a letter of acknowledgement within twenty-four hours of lodgement. About three days later we normally receive a letter confirming the Ombud’s acceptance of the case.

This letter then specifies fifteen business days to resolve. Our experience has been for resolution at an earlier time, there have been cases resolved later too. As will be well understood, timelines are only guidelines. The general experience has been for relatively quick turnaround.

It should be noted that the Ombud requests for interest on late payment, frequently succeeding in this regard.

Have there been unsuccessful cases?

SARS has on occasion rejected complaint with sound justification.  As an example, the scenario where a refund owing for one tax type is set off debt owing for another, such as a VAT refund being refused for income tax owing; the VAT refund is set off income tax payable rather than being paid out. This process is formally known as debt equalisation.

We have found that engaging with the Ombud leads to feedback from SARS which serves as vital intelligence, valuable insights for the taxpayer beyond why a refund has not been paid out.

Will complaining to the Ombud “rub SARS up the wrong way”? Will SARS be aggrieved, perhaps frustrate maters elsewhere?

Outcomes during pilot phase have overall been favourable. SARS have been distinctly cooperative throughout the process.

The Ombud is an institution legally empowered: Chapter One, Part F of the Tax Administration Act, 2011 is dedicated to the Ombud, where the body’s mandate and powers are defined. Confidentiality is enforced in the strictest terms.

What is the fee for this service?

The fee (ex. VAT) is calculated based on value of the refund in question. As refund amounts increase in value, so too does scrutiny, higher scrutiny by the Ombud and by SARS. Further requests, enquiries and correspondence inevitably lead to more time having to be dedicated to the case in question. This is the rationale for bump up as value increases.

Delays in receiving refunds can be cause for enormous stress, we have seen this first hand. We fully understand the kind of strain this problem can bring. We hope this service meaningfully helps in alleviating. The charge has been made as reasonable as is feasible and includes contingency. The fee is all-inclusive, consisting of services mentioned in this document as necessary to complete, submit and/or substantiable  to the Ombud.