What if I'm audited or selected for verification? 

Being selected for an audit and being selected for verification are two different processes. See further down on this webpage if you want to know about being audited.  

What is verification?

Verification is a face-value verification of the information declared by the taxpayer on the declaration or in a return. This involves a comparison of this information against the financial and accounting records and/or other supporting documents to ensure that the declaration/return is a fair and accurate representation of the taxpayer’s tax position.
 
Once you have submitted your declaration/return, your declaration/return could be selected for verification.
 

Who can be selected for verification?

Any taxpayer can be selected by SARS for verification for the purpose of proper administration of tax, including on a risk basis.
 

What steps should I take if I am selected for verification?

If you are selected for verification, you will be notified by SARS through an official letter. This letter will indicate that you must either submit the requested relevant material (supporting documents) or IT14SD (applies only to Company Income Tax) within 21 business days from the date on the letter or alternatively submit a the date on the letter or alternatively submit a Request For Correction (RFC).
 
The required relevant material will differ depending on the tax type.
 
Top Tip: The relevant material needed will be listed in the verification letter sent by SARS.
 
If you are an eFiler you can use this channel to submit your documents. Scan your relevant material and save it on your computer/desktop. Log onto eFiling, upload your documents and submit them on eFiling. Please remember to click 'submit' in order to send the documents to SARS.
 
Alternatively you can walk into a SARS branch and submit your documents there.
 
Top Tips:
  • The link to upload relevant material on eFiling is only available upon receipt of the letter requesting the relevant material (refer to the relevant guides on eFiling):
    • Upload all the relevant material as requested in the above mentioned letter.  
    • Once all the relevant material has been uploaded, click the ‘submit’ button to submit it to SARS. PLEASE NOTE that once the relevant material is submitted, the link will close and you will not be able to upload any further documents.
  • Make sure the original letter sent by SARS is included when you submit relevant material on eFiling or via the branch, as it contains a unique bar-coded reference which links the uploaded relevant material to your tax records.
  • Ensure that the following standards are adhered to when supporting documents are uploaded:
    • The file type may be .pdf, .doc, .docx, .xls, .xlsx, .jpg and .gif to enable SARS to view the documents.
    • The maximum allowable size per document is 2MB and a maximum of 20 documents may be uploaded.
At all times, the taxpayer can approach the Voluntary Disclosure Unit to make a voluntary disclosure.  Refer to the Voluntary Disclosure programme for more guidance on that process.
 

What can I expect during the verification?

A letter requesting further relevant material could be issued if the relevant material initially supplied was not sufficient to finalise the verification.

If you have a refund due, the refund will not be paid out while the verification is in progress.

What if I don't respond to the request for verification?

If you do not respond by submitting an RFC or providing the relevant material, a second letter will be sent to you. If you still do not respond, a SARS official will contact you telephonically and request that you submit the necessary relevant material within 5 business days.
 
Should you not respond to this telephonic request, SARS may raise an assessment based on information readily available or obtained from a third party.
 
Top Tip: It is better to respond to all queries straight away. Higher penalties can apply if it is found that an understatement occurred.


What can I expect when the verification is finalised?

Once you have submitted all the requested relevant material, the verification should be finalised within 30 to 60 business days.
 
SARS must ensure that the tax position declared is in line with the relevant tax legislation.  If it is found to be incorrect, an assessment will be raised. 
 
The levying of understatement penalties must be considered where an understatement occurred. The percentage of a penalty varies from 0% to 200%. Harsher penalties are reserved for culpable repeat offenders or obstructive taxpayers.
 
Once the verification is finalised, you can expect one of the following:
  • Where no further risk(s) were identified and no finding was made, a Notification of the finalisation of the verification via eFiling, e-mail or post;
  • Where no further risk(s) were identified and a finding was made, a Notice of Assessment of the revised assessment via eFiling, e-mail or post;
  • Where further risk(s) were identified, a Referral for Audit Letter via eFiling, e-mail or post.  If you have a refund due, the refund will only be paid once the audit is complete and the specific refund validations were passed.
If you are aggrieved by the assessment, you can dispute it.  Refer to Objections for more guidance on that process.
 
 

What is an audit?

It is an examination of the financial and accounting records and/or the supporting documents of the taxpayer to determine whether the taxpayer has correctly declared his/her tax position to SARS.  Where the taxpayer has not made a declaration or filed a return, it is an investigation regarding whether the taxpayer’s actions complies with the provisions of the relevant tax legislation.
 

Who can be selected for audit?

Any taxpayer can be selected by SARS for an audit for the purpose of proper administration of tax, including on a risk basis. Taxpayers may also be selected for audit on a random or cyclical basis.
 

What should I expect if I am referred for an audit?

If you are subject to verification and the verification process has been completed, your tax affairs could still be referred for audit as part of the SARS compliance process.  This does not mean that an audit has commenced.  You must still await either a formal Notification of Audit (where the audit has been allocated to a specific auditor) or a Notice of Assessment (where a finding was made during the verification and the audit did not commence).  This process could take up to 120 business days.
 

What steps should I take if I am selected for an audit?

An audit is only deemed to commence once a formal Notification of Audit by a specific auditor is issued to the taxpayer.  If relevant material (supporting documents) is requested in the notification, you should submit the relevant material to SARS within 21 business days from the date on the letter.  Alternatively, arrangements will be made with you to conduct a field audit at your convenience. Photocopy costs can be recovered from SARS where a field audit is conducted, provided that certain requirements are met.the date on the letter.  Alternatively, arrangements will be made with you to conduct a field audit at your convenience. Photocopy costs can be recovered from SARS where a field audit is conducted, provided that certain requirements are met.
 
The required relevant material will differ depending on the tax type and scope of the audit. Please note that SARS can also obtain relevant material from any third party.
 
The relevant material is preferred in electronic format and arrangements can be made for an Electronic Forensic Specialists to download these from your computer systems. If you are an eFiler, you can scan your relevant material and save them on eFiling. Log onto eFiling, upload your documents and submit them via eFiling. Please remember to click 'submit' in order to send the documents to SARS.
 
Alternatively you can make arrangements with the SARS official indicated on the letter to collect the requested relevant material or to have it delivered. 
 
Top Tips:
  • Make contact with the SARS official mentioned in the letter.
  • The link to upload relevant material on eFiling is only available upon receipt of the letter requesting the relevant material (refer to the relevant guides on eFiling):
    • Upload all the relevant material as requested in the above mentioned letter.  
    • Once all the relevant material has been uploaded, click the ‘submit’ button to submit it to SARS. PLEASE NOTE that once the relevant material is submitted, the link will close and you will not be able to upload any further documents.
  • Make sure the original letter sent by SARS is included when you submit relevant material on eFiling or via the branch, as it contains a unique bar-coded reference which links the uploaded relevant material to your tax records.
  • Ensure that the following standards are adhered to when supporting documents are uploaded:
    • The file type may be .pdf, .doc, .docx, .xls, .xlsx, .jpg and .gif to enable SARS to view the documents.
    • The maximum allowable size per document is 2MB and a maximum of 20 documents may be uploaded.
Should you require any further assistance, contact the SARS Official mentioned in the Notification of Audit.
At all times, the taxpayer can approach the Voluntary Disclosure Unit to make a voluntary disclosure. Refer to the Voluntary Disclosure programme for more guidance on that process.
 

What can I expect during the audit?

 
You can expect the following:
  • The Notification of the audit will indicate the initial scope of the audit;
  • The SARS Auditor will produce an Authorisation Letter where a field audit is conducted;
  • Progress reports of the stage of the audit will be issued at intervals of 90 calendar days from the date of the notification of the audit;
  • If you have a refund due, the refund will not be paid out during the execution of the audit.
The progress reports may not apply if SARS is of the view that it will impede or jeopardise the outcome of the audit.
By its nature, an audit is a more intrusive process than a verification and the scope could be extensive. The audit could be completed within anything from 30 business days to 12 months, or even longer, depending on the complexity of the matter, the volumes of transactions involved and the level of co-operation by the taxpayer.
SARS can request additional or further relevant material throughout the audit. If you do not respond by submitting the relevant material when requested, SARS will raise an assessment based on information readily available or obtained from a third party.
Should you require any further assistance, contact the SARS official mentioned in the Notification of audit letter.
Top Tip: It is better to respond to all queries straight away. Taxpayers whom are obstructive could face higher penalties should it be found that an understatement occurred.
 
 

What if my tax position is found to be incorrect during an audit?

SARS must ensure that the tax position declared is in line with the relevant tax legislation.  If it is found to be incorrect, an assessment must be raised. 
 
A SARS assessment normally becomes final within 3 years from the date of assessment (non-self-assessment taxes like Income Tax) or 5 years from date of assessment (self-assessment taxes like Value Added Tax). SARS does however, have the right to open an already prescribed assessment where fraud, misrepresentation or non-disclosure of material facts is identified. Furthermore, SARS has the right to extend the prescription date in certain instances.
 
The levying of understatement penalties must be considered where an understatement occurred. The percentage of a penalty varies from 0% to 200%. Harsher penalties are reserved for culpable repeat offenders or obstructive taxpayers.
You can expect a notification indicating the findings of the audit once completed, unless you waive the right to receive such notification. You need to respond to this Notification within 21 business days indicating your agreement or disagreement with the proposed adjustments.  You must also provide evidence to support your view where you disagree and provide reason(s) and evidence as to why understatement penalties should not be imposed.
 
Kindly note that the notification does not apply if SARS is of the view that it will impede or jeopardise the outcome of the audit.
 
The response to the Notification of audit findings will be considered.  If SARS is still of the view that a revised assessment must be done; or where the taxpayer chose not to respond to the Notification of audit findings, the imposition of understatement penalties will be considered. Thereafter a revised assessment will be raised and a Notice of Assessment and a letter detailing the grounds for the assessment will be issued via eFiling, e-mail or post.  Any refund due to you will be paid out after the completion of the audit, subject to specific refund validations being passed.
 
If no finding was made as result of the audit or SARS conceded based on the response by the taxpayer to the Notification of audit findings, a letter indicating the finalisation of the audit will be issued via eFiling, e-mail or post.
 
If you are aggrieved by the assessment, you can dispute it.  Refer to Objections for more guidance on that process.

Should you require any assistance after finalisation of the audit, contact the SARS Contact Centre on 0800 00 7277.
 

To access this page in different languages click on the links below:

Last Updated: 22/11/2017 10:21 AM     print this page
SARS eFiling eFiling Login eFiling Register Now eFiling Forgot Password eFiling Forgot Username E@syFile
FIND A PUBLICATION
FIND A FORM
FIND AN FAQ