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FAQ: When is it appropriate to settle a dispute?

SARS may, where it will be to the best advantage of the state, settle a dispute in whole or in part, on a basis that is fair and equitable to both the taxpayer and SARS.

  • SARS must have regard to a number of factors, including:
    • Whether that settlement would be in the interest of good management of the tax system, overall fairness and the best use of SARS’ resources;
    • The cost of litigation in comparison to the possible benefits with reference to:
    • The prospects of success in a court;
      • The prospects of the collection of the amounts due; and
      • The costs associated with collection.
    • Whether there are any:
      • Complex factual or quantum issues in contention; or
      • Evidentiary difficulties
  • Which are sufficient to make the case problematic in outcome or unsuitable for resolution through the alternative dispute resolution procedures or the courts;
    • A situation where a participant or a group of participants in a tax avoidance arrangement has accepted SARS’ position in the dispute, in which case the settlement may be negotiated in an appropriate manner required to unwind existing structures and arrangements; or
    • Whether the settlement of the dispute will promote compliance by the taxpayer or a group of taxpayers or a section of the public in a cost-effective way.

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