The South African Revenue Service (SARS) randomly picks taxpayers to review their documents to ensure they are correct and accurate. SARS also carry out verification or audit to check if taxpayers are not underpaying their taxes. When you receive a review letter from SARS, there are certain measures you should take to ensure the process is seamless. Read on to learn how long it takes for SARS to review documents.
How Long Does SARS Take to Review Documents?
Verification or review of documents is the process of checking the information declared by the taxpayer on their tax declaration or return to see if it is correct and accurate. The review involves comparing the information provided against data obtained from other sources like accounting and financial records.
Other supporting documents are used in the review to ensure the return/declaration is a fair reflection of the taxpayer’s position. The review process is usually completed within 21 business days from the day all the relevant documents are received.
How Long Does SARS Take To Investigate?
After the verification process, SARS can initiate an audit to further investigate the taxpayer’s tax position. Any taxpayer can be randomly selected for an audit. SARS usually completes an investigation within 30 business days, but in some cases, it can take up to 12 months or longer.
The volumes of transactions involved and their complexity determine the period it takes for the review to be completed. The taxpayer’s level of cooperation also affects the time it will take for SARS to investigate your tax position.
SARS can request additional material during the audit, and you should promptly respond to speed up the process. If you fail to respond when asked to provide relevant material, SARS can use the information already available or obtained from other sources.
If you are prepared for the audit, the process will be seamless, and it can take less than 30 business days. You also need to know that if the audit takes more than a few months, this might be a sign of a red flag. The auditor might be investigating other issues that may be suspicious.
How Long Does SARS Take To Refund After Verification?
When the verification is in progress, no refund will be paid out, even if it is due. When verification is complete, you will get a letter from SARS informing you about the outcome. You will get a refund for overpaying tax within seven business days if the verification is successful. You should meet the following conditions:
- Your return filings are up to date
- You have no outstanding arrears to SARS
- You have no pending administrative issues with SARS
If an auto assessment for individual taxpayers or small businesses is conducted, the refund can be paid within 72 hours or two to three business days.
How Does SARS Check Information Submitted in Tax Returns?
When SARS checks the information submitted for tax returns, several things are considered. During the verification process, SARS checks if the tax disclosures can be corroborated with relevant supporting documentation. A thorough examination of financial records and other supporting documents is conducted to determine if the taxpayer has declared their tax position to SARS correctly.
Other taxpayers often use unorthodox means to underpay their taxes. A verification exercise will unearth these disparities. The main purpose of this process is to ensure that a return or declaration fairly represents your tax position.
SARS carefully checks the information to uncover understated income or overstated deductions. The good thing is that taxpayers who have been overpaying to SARS will get refunds after the verification process.
Why Is SARS Verification Taking So Long?
SARS verification usually takes about 21 days if the taxpayer’s required documentation is in order. If the volumes of the transactions are huge and complex, the verification process is likely to take longer. If the taxpayer fails to cooperate with SARS by providing the relevant documents requested, the process can take longer to complete.
When you are asked to provide additional documents, make sure you respond promptly. Incomplete documents can derail the verification process, and this will delay your tax refund if you have anything due.
When SARS has outdated, incomplete, or invalid baking details and other information, there is likely to be a delay in the verification process. It is a good idea to respond to all requests to avoid penalties. If there are a lot of adjustments on your return, the verification process will be delayed. SARS officials would go through all the details you provide to determine your true tax position.
If you own a small business, the verification process can take longer as SARS tries to prove the authenticity of all the details you provide. If you have outstanding penalties, SARS will first deal with them to ensure the taxpayer complies with the law.
If you disagree with other elements in the verification exercise, the process can take longer. You need to ensure that you have the correct details and cooperate with the SARS officials. If you have any queries, do not hesitate to ask the official undertaking the verification.
Another factor that can affect the outcome of the exercise is the type of verification being undertaken. When you receive the notice of SARS verification, you will also get the details about the entire procedure.
SARS can randomly pick taxpayers to review their documents to determine their tax position. Other taxpayers tend to misrepresent information in a bid to underpay their taxes when they file returns. To address this issue, SARS regularly undertakes verification exercises where different issues are considered.
The process of verification usually takes 21 business days, and an audit can take 30 business days or more than 12 months, depending on the complexity of your transactions. To make the process seamless, you must be ready to provide the required documents. You also need to cooperate with the SARS officials to speed up the process. No tax refund can be processed when verification is in progress.
