The relationship between a taxpayer and a tax practitioner is the foundation upon which tax compliance is built. A tax practitioner is expected to clearly outline the tax laws and obligations to his client. Furthermore, the tax practitioner must accurately and honestly assist clients when engaging with SARS and completing returns. There is therefore a compulsory legislative framework for the registration of tax practitioners.
Subject to several exceptions, a person who provides advice on the application of a tax Act, or who completes or assists in completing a return on behalf of another person, must comply with two registrations. First, they must register with a controlling body, such as IRBA, SAICA or the LPC. Second, they must register with SARS. Without these registrations a person is not entitled to practice as a tax practitioner, and those who do are guilty of a criminal offence, which upon conviction may incur a fine or imprisonment of up to two years.
A person must register with SARS as a tax practitioner within 21 business days after the date on which he, for the first time, provides advice or assists in completing a return.
There are circumstances when a person is not allowed to register as a tax practitioner or SARS may de-register a tax practitioner. These include, where during the preceding 5 years the person has been:
- removed from a related profession by a controlling body for serious misconduct;
- convicted of certain criminal offences such as theft, fraud, forgery, perjury or any offence involving dishonesty for which the person must have been sentenced to a period of imprisonment exceeding 2 years without the option of a fine;
- convicted of a serious tax offence.
There is also a requirement that a tax practitioner remains tax compliant in respect of his own tax affairs or at least remedies his non-compliance as soon as possible. It is sensible that a person who is unable to keep their own tax affairs in order should not be allowed to look after the tax affairs of others.
SARS is prohibited from registering a prospective tax practitioner, or must de-register a registered tax practitioner, where the person has been non-compliant for an aggregate period of at least 6 months during the preceding 12-month period. In addition, the tax practitioner must have failed to demonstrate compliance or remedy the non-compliance within the periods specified by SARS in its notice.
Choosing the right tax practitioner is important. Professionalism, experience, expertise and above all integrity is what taxpayers should look out for in their tax practitioner.
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