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.
