Not to be overlooked: The importance of an accurate tax return
Recent South African case law emphasises the extreme importance of ensuring tax returns are completed accurately. The incorrect disclosure of factual information in a tax return could have far-reaching consequences for the taxpayer – despite such incorrect disclosure being innocently made.
Prescription does not run
Far reaching implications for the taxpayer in circumstances where tax returns are completed incorrectly include SARS being in a position to issue additional assessments in respect of historic tax periods (dating back more than 3 years from the date of the original assessments) with no bar thereto on the basis of prescription. Ordinarily, SARS may not issue additional assessments for tax periods dating back more than three years, unless there is fraud, misrepresentation or non-disclosure of material facts on the part of the taxpayer.
In the recent decision of the Supreme Court of Appeal (“SCA”) in The Commissioner for the South African Revenue Service v Spur (Case No. 320/20  ZASCA 145 (15 October 2021), SARS averred that there was misrepresentation and non-disclosure of material facts on the part of the taxpayer as it was common cause that the taxpayer had answered the introductory questions to the tax return incorrectly.