The South African Revenue Service (SARS) has introduced an advance tax ruling system which allows you, as a taxpayer, to request a ruling from the taxman on the interpretation and application of the tax laws to a specific transaction.
The Commissioner of SARS can issue two new types of rulings: binding private rulings and binding general rulings. Once a ruling has been made, and provided that you have disclosed all the material facts, you can expect SARS to abide by the ruling when it assesses your tax liability. SARS will also publish all binding private rulings that it has issued, without naming the person who applied for the ruling.
Applications for binding private rulings can be made on the e-filing site (www.sarsefiling.co.za) from October 16. You will have to pay an application fee and a cost-recovery fee. The application fee for small businesses is R2 500. It is R10 000 for all other taxpayers. The cost-recovery fee will generally depend upon the complexity of the proposed transaction in question and the issues raised in the application.
SARS will continue to issue free, non-binding written opinions to taxpayer queries.