So, you owe the taxman?! For how long can you be held liable?
By Nicolene Schoeman-Louw
One of life’s few certainties is the payment of taxes. Bearing that in mind, we should ensure that we never find ourselves in a predicament to have an outstanding account with the taxman in the first place, which of course, is sound advice. In cases of liquidation, we know that the South African Revenue Service (“SARS”) is a preferential creditor and therefore gets paid before any other creditor. To a certain degree, SARS is very different, and debts are similarly treated differently than general obligations. What must you do when there is fraud in your business or oversight of some sorts resulting you being in arrears? Also, for you long can you be held liable by SARS?
Prescription of debt is a concept regulated by the Prescription Act, 68 of 1969, as amended (“Prescription Act”). Generally, debts prescribe or become extinguished within three years from becoming due.
So, in the case of a tax debt – what is the position?”
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Courtesy of: Schoemanlaw Inc