After numerous complaints SARS implemented a new VAT refund process just over a year ago.
How does it work?
SARS commits to paying refunds within 21 business days of receiving a VAT return, subject to:
• The return being correctly filled in
• The taxpayer owes no monies to SARS and there are no outstanding VAT returns
• Banking details of the business being valid
Interest is paid to the taxpayer for non-payment after 21 business days.
A computer program analyses VAT returns and selects “high risk” refunds. Taxpayers selected will get a request for documentation (usually within 48 hours of submitting the VAT return) which needs to be submitted within 21 business days. The refund only becomes due when SARS are satisfied that the refund is due and valid. Then the commitment to paying refunds in 21 business day rule kicks in.
Taxpayers may object to the assessment by completing the Alternative Dispute Resolution form. This must be done within 30 business days. SARS aim to resolve the objection in 90 days. If taxpayers are still not satisfied they may appeal.
What to do
It becomes time consuming when taxpayers are asked to submit justifying documentation which will negatively affect the taxpayer’s cash flow.
• Ensure you submit your return accurately and timeously.
• Watch your account on eFiling and respond promptly to any requests for documentation (if you don’t respond within the 21 business days, SARS can issue an assessment denying the input VAT claim).
• Submit the documentation on eFiling to avoid queues at SARS’ offices.
• Then monitor your statement of account on eFiling as it will reflect any new assessments or refunds due.
In other words be proactive to reduce your waiting time to a minimum..