South Africa: Estimated assessments for VAT

The South African Revenue Service (SARS) on 11 December 2023 announced that functionality has been introduced to allow it to issue estimated assessments for value added tax (VAT) in specific circumstances.

SARS is permitted to issue estimated assessments when a taxpayer effectively does not present SARS with sufficient information to verify the disclosures (or lack of disclosures) made to it. SARS has not previously issued estimated assessments for VAT purposes in the event that a vendor does not submit supporting documentation following a VAT return verification request. It has now announced, however, that it can issue estimated assessments in these circumstances. 

Important considerations to note:

• Estimated assessments will be issued to vendors in the form of a VAT217 notice. 
• If SARS has raised an estimated assessment for a specific tax period, the vendor will not be afforded the opportunity to request a correction of the VAT return for that tax period.
• Since an estimated assessment where supporting documentation has not been submitted to SARS is not subject to objection or appeal, the vendor will not be permitted to dispute the estimated assessment issued under the normal dispute resolution process.
• However, if a vendor disagrees with the estimated assessment raised, it may submit the relevant supporting documentation in respect of the tax period to SARS via eFiling, at a SARS branch or via the SARS Online Query System, within 40 business days from the date of the VAT217 notice. If the vendor is unable to provide the relevant documentation within the specified timeframe, an extension of the 40 business day period may be requested by the vendor.
• In the event that SARS issues a revised assessment following submission of documentation, such assessment would be subject to objection or appeal under the normal dispute resolution rules.
• The vendor may submit a request to SARS for the suspension of payment due in respect of the estimated assessment issued. 

Read a January 2024 report [PDF 379 KB] prepared by the KPMG member firm in South Africa