REGISTERED TAX PRACTITIONER

USE ONLY A REGISTERED TAX PRACTITIONER BECAUSE …..

By 1 July 2013, all “tax practitioners” are required by the Tax Administration Act (TAA) both to register with (or fall under the jurisdiction of) a “recognised controlling body” and to register with SARS. Failure to do so is a criminal offence. 

As a business owner it is in your interest to ensure, if you make use of a tax practitioner, that he or she is correctly registered. There is no legal onus on you to do so but, for example, you don’t want to have SARS investigating your tax affairs because they discover that your tax adviser is operating illegally. 

What is a “Tax Practitioner”?

This is broadly defined as any person who gives advice to another person on any tax Act or a person who helps to complete or completes any type of tax return for another person. 

The main exclusions to this are where the person –

• Is an employee of the other person,
• Does not charge for the services rendered,
• Gives advice in anticipation of tax litigation, or 
• Renders tax services but they are incidental to another service performed for the person.

Practitioners falling outside these exclusions will need to register with a recognised controlling body and with SARS by 1 July.

What is a “Recognised Controlling Body”?

It is a body recognised by SARS that requires its members to –

• Have minimum qualifications and experience
• Undergo on-going professional training
• Be subject to a disciplinary code
• Have a code of conduct and code of ethics

SARS recognises chartered accountants, auditors, attorneys and advocates who belong to their respective “controlling bodies”,   SAICA (the South African Institute of Chartered Accountants) being one such body granted recognition. 

Why regulate Tax Practitioners?

SARS is of the view that there are too many unqualified tax advisers who do not have the knowledge and experience to give good advice to their clients. This means SARS has to spend unnecessary time unravelling this advice which in turn results in penalties and interest for taxpayers. Making tax practitioners join a “recognised controlling body” will bring accountability and professionalism to the tax advice industry. 

By way of analogy, in recent years financial advisers had to take an exam to prove they could meet the necessary standard. This reduced the number of financial advisers by 65% and brought higher standards to the industry.

The only downside is that some experienced tax advisers who have no qualifications will be forced out of the industry.