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.
