62How these limits will affect you as a vendor:

• Debit order payments to SARS cannot exceed R500 000. Penalties and interest as a result of a late payment will be incurred if the debit order cannot be processed for whatever reason. SARS will discontinue all manual debit orders with effect from 1 July 2011 and no new debit order applications will be accepted. However, vendors registered on eFiling may continue paying by debit order provided that a new debit order arrangement via eFiling is initiated.

• Cheque payments to SARS may not exceed R100 000. Should you issue a cheque exceeding this amount, it will be returned to you and penalties and interest as a result of a late payment will be incurred.

• EFT payments in excess of R500 000 must be cleared with your banker.

• eFiling transactions will not be affected by these rules as no limits are imposed.

Should your existing payment method exceed any of these limits, you must approach your bank timeously in order to effect an electronic transfer of funds to ensure that the full VAT payment can be made by the due date. For more information on payment rules and acceptable payment methods, please refer to the following documents which can be accessed on the SARS website

:

• FIN-GP-02-G1 – SARS Payment Rules – Reference Guide

• FIN-GP-02-G1-FAQ1 – SARS Payment Rules – FAQ

• SARS Payment Rules leaflet – updated

• FIN-GP-L14 – Discontinuation of Debit orders for manually submitted VAT201 declarations –

External Correspondence

• New cheque payment rules implemented by PASA.

9.6

MANAGING YOUR PAYMENT

The eFiling system provides for a VAT payment allocation function and a VAT Statement of Account (VATSA). The VAT payment allocation function enables vendors to allocate payments, to reallocate payments and to locate missing payments. These functions can be performed by vendors without requiring any intervention from SARS. Manual filers and those eFilers that require assistance can approach SARS for assistance in making these allocation adjustments at any SARS branch.

The VATSA is similar to the Employer Statement of Account (EMPSA) and will be issued by SARS as per the vendor’s registered category on a regular basis. The VATSA contains information which will empower vendors to manage their VAT accounts by giving them insight into their transactions per tax period.

Vendors can request the VATSA through the following channels:

• eFiling

• SARS branch

• SARS Contact Centre.

For more information, please refer to the SARS website

.

9.7

PENALTY AND INTEREST FOR LATE PAYMENT

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9.8

REFUNDS

The TA Act provides that a vendor is entitled to a refund when an amount is refundable under the VAT Act and is reflected in the return or when a vendor is entitled to be refunded an amount that was erroneously paid in excess of an amount charged in an assessment. SARS should refund you within 21 business days.41

SARS may withhold a refund until:

• Details of a vendor’s bank account have been provided;

• A vendor has filed all outstanding VAT returns; or

• SARS is satisfied that a refund claimed will be refunded to another party by the vendor where the claimant vendor’s output tax is borne by that other party.

If a vendor provides acceptable security, SARS must release a refund before verification, inspection or audit is finalised. A decision not to authorise a refund is subject to objection and appeal. Refer to Chapter16 and the

Short Guide to the TA Act, 2011for more details.

When your return results in an amount to be refunded, SARS should refund you within 21 business days. Should the refund not be made within this time, interest at the prescribed rate is payable to you. However, the 21 business days interest-free period can be extended where the vendor does not provide relevant material as and when requested. Refunds will only be paid out to you if you do not owe any amounts of other taxes administered by the Commissioner. In such cases, debt equalisation will be applied to offset the amounts owing in respect of other taxes, and the balance (if any) will be refunded. For more information on refunds and interest

on refunds in terms of the TA Act, refer to the SARS website.

With effect from 1 April 2009, only non-resident companies and resident companies that are part of the same group structure may request that VAT refunds be paid into a bank account of a nominated person. In the case of a “subsidiary company” or “holding company” as contemplated in the Companies Act, VAT refunds may be paid into the bank account of either the subsidiary company or holding company, on condition that SARS is indemnified against any loss which may occur. Due to concerns involving VAT refund fraud, the use of third party bank accounts will not be permitted in any other cases.

Should you wish to nominate or use the banking account of another vendor, you must supply the necessary authority from the account holder (for example, company resolution) and provide indemnity to SARS against possible losses of amounts paid into such accounts on form VAT 119i. This form is available from SARS offices or the SARS website.

In order to reduce the risk of VAT fraud, SARS makes use of a sophisticated risk engine that applies objective risk criteria, including third party data to identify high risk VAT refund claims for further investigation and audit each month. Vendors selected for further verification of their refund claims are requested to submit documents in support of their declaration or to revise their declaration (submit a revised return where an error is suspected).

You can make use of the Refund Dashboard which is a function that will enable you to view the reasons why your refunds may not have been paid out and what actions may be required of you. Only refund statuses from March 2011 will be displayed on the Refund Dashboard. This function is available on eFiling for registered eFilers. Vendors who call the Contact Centre or go to a SARS branch to request information will be assisted by SARS agents who have access to the dashboard.

For more information on payment allocations and the Refund Dashboard, please refer to the following documents on theSARS website

:

• VAT 201 – Payment Allocation Guide

• VAT Letter – VAT Payment Allocation function

• VAT Letter – Refund Dashboard.

Note that generally, any amount constituting “input tax” as defined in section 1 and any refund contemplated in Chapter 13 of the TA Act must be claimed within a period of five years from the date the return was submitted. Chapter 13 of the TA Act must be read with section 44 of the VAT Act.

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9.9

CHANGE OF BANK DETAILS

The fraudulent changes to taxpayers’ bank details remain one of the biggest risks that SARS has to deal with. It is SARS’s responsibility to protect taxpayers from any fraudulent transactions on their SARS accounts emanating from within SARS. To prevent such risks, vendors should note that under no circumstances will SARS request a vendor’s bank account details over the phone or accept bank account detail changes via facsimile, post, drop-box or e-mail.

A power of attorney appointing a person as the taxpayer’s duly authorised agent will no longer be accepted for the changing of bank account details. Only changes through the following channels will be accepted:

• In person at any SARS branch. (This is the SARS preferred channel)

• Through the SARS eFiling channel if you are registered as an eFiler.

When visiting a SARS branch to change your bank account details, please ensure that you have the documents required as set out in the following documents which are available on the SARS website:

• AS-VAT-15 – Change of Bank Details for a Registered VAT Vendor – External Policy

VAT 404 – Guide for Vendors Chapter 10

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CHAPTER 10