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Tax Risk Management: Recent Cases, Taxpayer Rights, and International Comparisons

Stay informed on recent tax cases, learn about taxpayer rights, and explore international comparisons in tax risk management. Find relevant material and understand info gathering powers. Access helpful tips for engaging with tax authorities, objection processes, and appeals. Available in English.

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Tax Risk Management: Recent Cases, Taxpayer Rights, and International Comparisons

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  1. www.TaxRiskManagement.com

  2. Alliances in: • United States – West Palm Beach, Boca Raton, Atlanta, New York • France - Paris • Nigeria – Lagos, Port-Harcourt, Abuja • Mauritius – Piton • South Africa – Johannesburg, Cape Town, Port Elizabeth • Zimbabwe - Harare

  3. Recent Cases for Clients • Uganda – USD$54m - TP • Malawi – USD$43m - TP • South Africa – USD$120m – TP • Zambia – USD$20m – Export goods & VAT • Zimbabwe – USD$10m – TP • Kenya– USD$5m – TP • Rwanda – USD$5m – TP/VAT

  4. Taxpayer rights • Constitution - Administrative Justice s 68 • AJA Chapter 10:28 • Administrative action • Section 3 – duties incl. reasons • Section 4 - relief • Schedule 12 of ITA • Principle of legality

  5. Interpretation of info gathering powers • Purposive approach? Constitytion and AJA affects info gathering

  6. Info gathering

  7. Info gathering ss 39 to 44 ITA • Concept is WIDE • Rule of law applies: ZIMRA can only use powers for purpose, and in manner, that such powers were conferred (Pharmaceutical Manufacturers case (CC 2000)) • Review the attachment of a PC s 44(8) during a warrantless search and seizure • ZIMRA must identify particular PURPOSE for the info request is made -> insufficient to generally state that ZIMRA is engaged in administration of a tax Act • Info-gathering powers = invasive: ZIMRA must on reasonable grounds believe that identified administration function would be served by information requested • Possible ulterior motive -> Refer Canadian RBC Life case; or Woodlands Dairy case [2010]JOL 26108(SCA) acting beyond jurisdiction

  8. Defn. “Relevant Material” • Defined (sec 44(1): “any information, document or thing that may consider necessary for the purposes of this ITA” • ‘”may consider necessary” should be “foreseeably relevant” to the PURPOSE identified by ZIMRA • “Relevant means that any two facts to which it is applied are so related to each other that according to common course of events, one, either taken by itself, or in connection with other facts, proves or renders probable the past, present or future existence or non-existence of the other.” (R v Katz AD 1946) • Relevance -> needs strong nexus between information sought and the particular administration function pursued • “Foreseeably relevant” -> to be determined objectively -> would reasonable person in ZIMRA position regard info as sufficiently related to particular administration function? (Compare Cape Metropolitan Council case iro delictual foreseeability) • Relevance = fact-specific, depends on case, requires common sense and logic to be applied to facts / circumstances of that info request (Van den Bergh case citing R v Matthews)

  9. How to contain info requests - engagement letter - Relevant material…should be referred to with reasonable specificity. - See Woodlands Dairy case [2010]JOL 26108(SCA) acting beyond jurisdiction - Argument of “Administrative Conduct” vs. “Principle of Legality”

  10. Relevant material that SARS “Requires”

  11. INTERNATIONAL COMPARISON: CANADA Canadian info-gathering provisions = not identical, but similar in concept and intent

  12. INTERNATIONAL COMPARISON: AUSTRALIA & NEW ZEALAND Australian & NZ info-gathering regimes = not identical to SA, but offer valuable insights e.g: Bottom-line: Australian and NZ courts appear quite sympathetic to revenue authority info-gathering powers?

  13. Tax Court • Letter of Findings, then Assessment • Reasons for assessment • Objection & Objection rejection reasons • Eliminate NEW grounds ZIMRA may raise • Appeal – Taxpayer’s case • Commissioner’s case • Replication • Consider in limine applications - examples

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