Due to the complexity and specialised nature of tax legislation, taxpayers often engage tax practitioners to assist them in complying with their obligations in terms of tax legislation. Chapter 18 of the TAA governs the registration and regulation of tax practitioners.
In terms of Section 240(1) of the Tax Administration Act (TAA), every person who provides advice to another person concerning the application of a tax Act or completes or assists in completing a document to be submitted to SARS by another person in terms of a tax Act must register with a recognised controlling body, and SARS, as a tax practitioner.
Recognised controlling bodies play an important role in regulating the conduct of tax practitioners. The recognition of controlling bodies (RCBs) is governed by Section 240A of the TAA. Senior SARS officials may lodge complaints regarding certain behaviours of tax practitioners with controlling bodies or recognised controlling bodies.
To ensure the professionalism of the tax advisory industry, SARS proposed amended criteria for the recognition of RCBs.
As of 1 June 2022, an RCB may register an individual as a tax practitioner if the individual meets the following requirements for minimum qualifications and experience:
• NQF level 6 and above with at least one accounting module and one tax module, plus at least 1 year’s tax working experience,
• NQF level 5 plus at least 4 years’ tax working experience, or
• NQF level 4 plus 10 years’ tax working experience. The tax working experience must be verifiable by the employers or clients.
In addition to the above, the individual needs to have successfully completed the SARS Readiness Programme, i.e. attend the SARS Readiness Programme and pass the assessment thereof, should be tax compliant and have submitted an independently verified criminal-free certificate in terms of section240(3) of the Act to their RCB’s, e.g. a certificate issued by the SAPS.
Once the individual is registered as a tax practitioner, an annual confirmation is required that the criminal free status remains unchanged. Following this, a sworn-in affidavit indicating the tax practitioners are criminal free in terms of the abovementioned section of the Act must be produced and provided to RCBs once every 5 years.
For tax practitioner members registered before 1 June 2022, the tax practitioners must submit to their RCBs attesting to their criminal free status. Thereafter, an annual confirmation is required that the criminal free status remains unchanged. Following this, a sworn-in affidavit indicating the tax practitioners are criminal free must be produced and provided to their RCBs once every 5 years.
From 1 June 2022, RCBs must ensure that their tax practitioner members meet a minimum of 18 verifiable CPE hours per year, which consists of 10 tax hours, 2 ethics hours, and 6 hours relating to the service provided. The pro-rata of the 18 hours per annum is applied to newly registered tax practitioners depending on the registration date. At least 20% of its members’ CPE records per year should be verified, and the records of the verified compliance status of its tax practitioner members should be retained.
Tax practitioners are required to retain their CPE records, e.g. competency certificates. The records must be retained for five years.
For the 2022 calendar year, the CPE hours will be calculated in pro-rata, i.e. from 1 January 2022 to 31 May 2022, the pro-rata of the previous requirements for CPE hours apply, and from 1 June 2022 to 31 December 2022, the pro-rata of the new requirements for CPE hours apply.
RCBs are required to notify SARS as and when they have dismissed a member due to gross misconduct. This enables the establishment of a centralised register that SARS will hold.
In addition, the RCBs must verify the tax compliance status of tax practitioners at least once a year.
SARS will conduct an annual review of the RCB recognition status. If the RCB fails to meet the recognition criteria and take remedial action within the stipulated timeframe by SARS, such RCB may be de-recognised by the Commissioner. A review of the RCBs and tax practitioner status will also be implemented from 1 July 2022.
SARS will, in addition, also conduct an annual review of the tax practitioner status. Suppose a tax practitioner fails to meet the registration criteria. In that case, SARS may deregister such tax practitioner with immediate effect if the non-compliance falls under the category of section 240(3)(a) to (c) (inclusive) of the TAA or after they failed to take remedial action within the stipulated timeframe if such non-compliance falls under the category of section 240(3)(d) of the TAA.
De-recognised RCBs and deregistered tax practitioners may request SARS to review its decision in terms of section 9 of the Act. However, the status of the RCBs and tax practitioners concerned will only be restored when SARS’ decision is reversed on completion of such review.
Prepared by CORE TAX
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