LAPD-TAdm-G02 - Comprehensive Guide To Advance Tax Rulings

SOUTH AFRICAN REVENUE SERVICE
COMPREHENSIVE GUIDE
TO
ADVANCE TAX RULINGS
Another helpful guide brought to you by the

South African Revenue Service
Comprehensive Guide to Advance Tax Rulings
Foreword
This guide will –
 assist you with filing an application for an advance tax ruling (ATR); and
 provide you with an overview of the ATR system and process.
This guide –
 will not elaborate on the specific technical and legal detail that is associated with tax;
 should not be used as a legal reference; and
 is not a binding class, general or private ruling in terms of Chapter 7 of the Tax
Administration 28 of 2011
Should you require information on any aspect of taxation that is not specifically related to an
ATR or the ATR Unit, you may –
 visit your nearest SARS branch office;
 contact the SARS National Contact Centre –
 if calling locally, on 0800 00 SARS (7277); or
 if calling from abroad, on +27 11 602 2093;
 visit the SARS website at www.sars.gov.za; or
 contact your own tax advisor or tax practitioner.
A list of Frequently Asked Questions about Advance Tax Rulings is available on the SARS
website.
Comments or suggestions on this guide may be sent to ATRInfo@sars.gov.za.
Prepared by
Legal and Policy Division
SOUTH AFRICAN REVENUE SERVICE
June 2013
Comprehensive Guide to Advance Tax Rulings i

CONTENTS
Foreword ............................................................................................................................... i
Glossary ............................................................................................................................... 2
1. Introduction .............................................................................................................. 1
1.1 Purpose, benefits and other considerations........................................................................... 1
1.2 A brief overview ..................................................................................................................... 2
1.2.1 Definitions .............................................................................................................................. 2
1.2.2 The ATR process in a nutshell................................................................................................ 4
2. General information ................................................................................................. 7
2.1 Tax Acts (tax laws) to which the ATR system applies ............................................................ 7
2.2 Application for an ATR........................................................................................................... 7
2.2.1 Special rule for partnerships ................................................................................................... 7
2.2.2 Special rules for certain applicants who are not resident ......................................................... 7
2.2.3 Rules for BCR and BPR applications ...................................................................................... 8
2.2.4 Meaning of ‘transaction’ and the scope of advance rulings – section 77 .................................. 9
2.3 Fees – section 81 .................................................................................................................. 9
2.3.1 Application fee ....................................................................................................................... 9
2.3.2 Cost recovery fee ................................................................................................................. 10
3. Rejections ............................................................................................................... 10
3.1 General overview ................................................................................................................ 10
3.1.1 Rejections – section 80(1) .................................................................................................... 11
(a) An application requesting the rendering of an opinion, conclusion or determination
regarding the market value of an asset – (section 80(1)(a)(i) ................................................ 13
(b) An application requesting an opinion, conclusion or determination regarding the
application or interpretation of the laws of a foreign country – section 80(1)(a)(ii) .................. 14
(c) An application requesting an opinion, conclusion or determination regarding the
pricing of goods or services supplied by or rendered to a connected person in relation
to the applicant or class members – section 80(1)(a)(iii) ....................................................... 14
(d) An application requesting an opinion, conclusion or determination regarding the
constitutionality of any tax law – section 80(1)(a)(iv) ............................................................. 15
(e) An application requesting an opinion, conclusion or determination regarding a
proposed transaction that is hypothetical or not seriously contemplated –
section 80(1)(a)(v) ............................................................................................................... 15
(f) An application requesting a ruling on a matter which can be resolved by SARS
issuing a directive under the Fourth or Seventh Schedule of the Income Tax Act –
section 80(1)(a)(vi) .............................................................................................................. 15
(g) An application relating to the duty of an employer to determine whether a person is an
independent contractor, labour broker, or personal service provider –
section 80(1)(a)(vii)(b) .......................................................................................................... 16
(h) An application that is submitted for academic purposes – section 80(1)(a)(viii) ..................... 16
(i) An application that presents, contains, or raises a frivolous or vexatious issue –
section 80(1)(b)(i)................................................................................................................. 16
(j) An application that presents, contains, or raises alternative courses of action by the
applicant (or requesting an opinion, conclusion or determination regarding such
alternative courses of action) – section 80(1)(b)(ii)................................................................ 16
(k) An application that presents, contains, or raises an issue that is the same as or
substantially similar to issues which are potentially or actually in dispute –
section 80(1)(b)(ii) ............................................................................................................... 17
(l) An application requesting the application or interpretation of any general or specific
anti-avoidance provision or doctrine – section 80(1)(c) ......................................................... 18
(m) An application regarding an issue that is of a factual nature – section 80(1)(d)(1) ................. 20
(n) An application regarding an issue, the resolution of which would depend upon
assumptions of future events or other matters that cannot be reasonably determined
at the time of the application – section 80(1)(d)(ii)................................................................. 21
(o) An application regarding an issue which would be more appropriately dealt with by
the competent authorities of the parties to an agreement for the avoidance of double
taxation – section 80(1)(d)(iii) ............................................................................................... 22
Comprehensive Guide to Advance Tax Rulings ii

(p) An application regarding an issue which is the same as or substantially similar to an
issue upon which the applicant has already received an unfavourable ruling –
section 80(1)(d)(vi) .............................................................................................................. 22
(q) An application regarding an issue in which the tax treatment of the applicant is
dependent upon the tax treatment of another party to the proposed transaction and
that other party has not applied for a ruling – section 80(1)(d)(iv) .......................................... 23
(r) An application regarding a proposed transaction that is part of another transaction
which has a bearing on that issue and the details of that other transaction have not
been disclosed – section 80(1)(d)(v)..................................................................................... 23
(s) An application regarding a matter that would be unduly time-consuming or resource
intensive – section 80(1)(e) .................................................................................................. 24
(t) An application requesting SARS to rule on the substance of a ‘transaction’ and
disregard its form – section 80(1)(f) ...................................................................................... 25
(u) The applicant fails or declines to provide additional information that has been
requested by SARS in connection with the application – section 79(5) .................................. 25
3.1.2 Additional considerations in respect of which the Commissioner may reject an
application – section 80(2).................................................................................................... 25
4. The ruling process ................................................................................................. 27
4.1 The nature of the process .................................................................................................... 27
4.2 The application process....................................................................................................... 27
4.2.1 Filing .................................................................................................................................... 27
4.2.2 Starting the application process ............................................................................................ 29
4.2.3 The pre-screening checklist.................................................................................................. 29
4.2.4 Standard terms and conditions ............................................................................................. 29
4.2.5 Contact details and other basic information .......................................................................... 29
4.2.6 Required statements and consent – sections 80(1)(b)(iii)(aa), 79(4)(n) and 79(4)(l) .............. 30
4.2.7 Payment of the application fee ............................................................................................. 30
4.2.8 Confirmation and assignment to a specialist ......................................................................... 30
4.2.9 Supporting information and other required submissions – section 79 .................................... 30
4.2.10 Acceptance or rejection of your application........................................................................... 31
4.2.11 Technical assistance ............................................................................................................ 31
4.3 Supporting information and other required submissions – sections 79(4) and (5) ............... 31
4.3.1 Supporting information ......................................................................................................... 31
4.3.2 Draft ruling – section 79(4)(f), ............................................................................................... 34
4.3.3 Information to be deleted before publication – section 79(4)(k) ............................................. 34
4.3.4 Conditions and assumptions – section 78(3) ........................................................................ 35
4.3.5 Organising your submission ................................................................................................. 35
4.3.6 Additional information requested by SARS – section 80(3) ................................................... 35
4.3.7 Confidentiality ...................................................................................................................... 36
4.4 Cost recovery fee – section 81(1) ........................................................................................ 36
4.4.1 Acceptance of the estimated cost recovery fee ..................................................................... 37
4.4.2 Advance payment requirement ............................................................................................. 37
4.4.3 Revised estimated cost recovery fee – section 81(2) ............................................................ 37
4.4.4 Discussing the original estimated cost recovery fee or revised estimated cost recovery fee .. 37
4.4.5 Payment terms..................................................................................................................... 38
4.4.6 Payments in arrears – subsequent applications .................................................................... 38
4.4.7 Refunds ............................................................................................................................... 38
4.4.8 Estimated time to issue a ruling ............................................................................................ 39
4.4.9 Estimated time to issue a reconfirmation and an extension ................................................... 39
4.5 Letter of Engagement .......................................................................................................... 39
4.5.1 Summary of standard terms and conditions – Annexure A .................................................... 39
4.5.2 Additional terms and conditions ............................................................................................ 39
4.6 Substantive review .............................................................................................................. 39
4.6.1 Checking on the status of your application............................................................................ 40
4.6.2 Notification in the event of a proposed negative ruling – section 79(7) .................................. 40
4.7 Issuance of the ruling and its publication in edited form ...................................................... 40
4.7.1 Draft copy for review and comment ...................................................................................... 40
4.7.2 Publication and treatment of confidential information (sanitised or edited ruling) –
sections 87(1), (3) and (4) ................................................................................................... 41
4.7.3 Issuance of the ruling ........................................................................................................... 41
Comprehensive Guide to Advance Tax Rulings iii

5. Effect of an ATR...................................................................................................... 42
5.1 General ............................................................................................................................... 42
5.1.1 Binding effect – section 82(1) ............................................................................................... 42
5.1.2 The applicability of a binding ruling – section 83 ................................................................... 42
5.1.3 No third party reliance – section 82(2) .................................................................................. 43
5.2 Circumstances in which a binding ruling may be rendered void or lose its binding effect .... 43
5.2.1 Circumstances rendering a BPR or BCR void – section 84(1) ............................................... 43
5.2.2 Subsequent changes in the tax laws – section 85 ................................................................. 44
(a) Amendment or repeal of the relevant tax laws – section 85(1)(a) .......................................... 44
(b) Subsequent judicial decisions – section 85(2)....................................................................... 45
(c) No notice by the Commissioner – section 85(2) .................................................................... 45
5.2.3 Status rulings ....................................................................................................................... 45
5.3 Withdrawal or modification by SARS – section 86 ............................................................... 46
5.3.1 Prior notice .......................................................................................................................... 46
5.3.2 Situations in which an ATR may be withdrawn or modified with retrospective effect .............. 46
5.3.3 Manner and form of the withdrawal or modification ............................................................... 46
5.3.4 Published rulings – section 87(9).......................................................................................... 47
6. Miscellaneous ......................................................................................................... 47
6.1 Questions and additional information .................................................................................. 47
7. Annexures ............................................................................................................... 48
Annexure A – Standard conditions and assumptions ....................................................................... 48
Annexure B – Documentation Checklist ........................................................................................... 50
Annexure C – ATR system process flow .......................................................................................... 51
Annexure D – Review process ......................................................................................................... 52
Annexure E – Example of a binding ruling application ..................................................................... 53
Annexure F – Standard ruling timelines ........................................................................................... 58
Comprehensive Guide to Advance Tax Rulings iv

Glossary
Abbreviations for the meaning of words, phrases or concepts are stated

below, unless the context indicates otherwise:
ATR advance tax ruling
ATR Unit Advance Tax Rulings Unit of the Legal and Policy
Division: Interpretation and Rulings
ATR system binding ruling application process and procedures
BCR binding class ruling
BPR binding private ruling
BGR binding general ruling
eFiling SARS electronic filing system
Income Tax Act Income Tax Act 58 of 1962
section section of the TA Act
TA Act Tax Administration Act 28 of 2011
VAT Act Value-Added Tax Act 89 of 1991
Comprehensive Guide to Advance Tax Rulings 2

1. Introduction
This guide provides information on the binding ruling application process and procedures
(ATR system), its purpose and on which tax matters binding rulings may not be issued.
1.1 Purpose, benefits and other considerations

The purpose of the ATR system is to promote clarity, consistency and certainty regarding the
interpretation or application of a tax Act. A binding ruling application can only be accepted if
the proposed transaction to which the interpretation is to apply will be concluded in the
future. There is no exception to this rule.
A binding ruling is intended to provide clarity and certainty on how SARS interprets and
applies the various tax laws to a proposed transaction. The ruling will be binding upon SARS
when you are assessed in connection with that proposed transaction, unless you have not
disclosed all the facts in connection with your proposed transaction or have not concluded
the transaction as described in your application. The scope and limitations of this binding
effect are detailed in 5.
The application procedures are prescriptive and structured. They are not designed to provide
answers to taxpayers’ general tax queries regarding their current tax affairs or general
questions about tax laws such as administrative or procedural matters (where, when or how
to file returns).
The application process can be relatively lengthy, so you will have to submit your application
timeously.
Before applying for a binding ruling, please consider the following questions:
 Is the answer to your question not clearly stated in existing information sources?
 Is the issue uncertain or complex in nature?
 Does the issue involve a significant amount of tax?
 Is it necessary to have formal legal certainty in the form of a binding ruling?
 Will you be able to meet the costs of obtaining a binding ruling?
 Have you allowed enough time for the binding ruling to be issued before the
commencement date of your proposed transaction?
The time period required to issue a binding ruling is normally a minimum of 20 business
days.1 You should also allow time for possible delays during the application process, for
example, if further particulars are required in addition to the information you provided.
If you decide to apply for a binding ruling it is recommended that you seek the assistance of
an accountant, lawyer or other tax professional.
1
The business days start when you have accepted the online notification of the cost recovery fee to
issue the ruling, faxed or uploaded the signed notification (called the Letter of Engagement) and
made an advance payment.

A binding ruling may only be issued by the Legal and Policy Division: Advance Tax Rulings
Unit at the SARS Head Office. All applications for binding rulings must be filed online on
www.sarsefiling.co.za. The eFiling system can also be accessed via the SARS website
www.sars.gov.za.
See Annexure F for a summary of the various applications, the period within which to apply
and the cost involved.
1.2 A brief overview

1.2.1 Definitions
Unless the context indicates otherwise, words are assigned the meanings ascribed to them
in section 75 of the TA Act. In addition, the following terms have the following meanings:
‘Advance payment’ refers to an amount calculated as a percentage (normally 20%) of the
highest estimated cost recovery fee that is payable in advance. This advance payment must
be received by SARS before the substantive review of your application can begin.
‘Advance tax ruling’ refers to a ‘binding private ruling’ or a ‘binding class ruling’ issued by
the ATR Unit of the Legal and Policy Division: Interpretation and Rulings under Chapter 7 of
the TA Act (also see the definition of ‘ruling’ on the next page).
'Anti-avoidance rule' refers to any general or specific anti-avoidance provision of the tax
laws, including sections 80A and 103 of the Income Tax Act and section 73 of the VAT Act,
as well as any judicial anti-avoidance doctrine, principle or mechanism.
‘Application fee’ means a fee payable over and above the cost recovery fee.
The application fee is payable when an applicant files an application and this fee is generally
non-refundable. The application fee is R2 500 for an ‘SMME’, as defined in the Government
Gazette. This includes eight hours reviewing free of charge. All other applicants will pay a
R14 000 application fee for either a BCR or a BPR application.
‘Application forms’ are the forms that must be completed and submitted online through the
eFiling system in order to file an application. The forms consist of –
 an e-Application that includes a pre-screening checklist, contact details and basic
information about the issues raised as well as a statement of standard terms and
conditions; and
 the binding ruling application that must be uploaded.
An example of a binding ruling application is attached as Annexure E. The eFiling system
limits the size of files to be uploaded to 10MB. Should the file exceed 10MB in size, please
contact ATRInfo@sars.gov.za for a directive. (Refer to section 79 and 1.2.2 under
Supporting information and other required submissions.)
‘Business days’ are business days calculated from the date of the completed application
which includes submission of all information as stipulated in section 79. Business days
exclude days during which SARS has to wait for information or feedback from the applicant.
Completion times are estimates and may vary depending upon various factors, including the
potential revenue implications raised by the application and the potential impact of the ruling
on other taxpayers. If it appears that these times may be exceeded, the applicant will be
notified in advance. The days from 16 December to 15 January (both dates included) must
be added to the estimated time to complete a ruling application. This ‘freeze period’ applies
to all applications that are in progress during that period.

‘Cost recovery fee’ refers to the fee prescribed by SARS for the issuance of a BCR or a
BPR. The fee excludes an application fee that is payable over and above the cost recovery
fee.
‘Estimated cost recovery fee’ refers to an estimate of the cost recovery fee which is
published online.
‘Extension’ refers to an extension of the validity period of a binding ruling issued previously
by the ATR Unit regarding a once-off transaction which has not occurred during the validity
period.
‘Issues raised’ refers to the specific questions asked in the application about the tax
implications regarding the proposed transaction.
‘Late application’ 2 refers to any application that is submitted on eFiling less than 20
business days before –
 the date of the proposed transaction; or
 any other date or deadline requested or specified in respect of the application,
whichever is earlier.
‘Filed’: An application is considered filed when the applicant has –

 accepted the estimated cost recovery fee made available on eFiling;
 signed and returned the Letter of Engagement made available on eFiling; and
 made the advance payment.
‘Notice of acceptance’ refers to an automated notice issued by the ATR Unit to the
applicant informing the applicant that the application has been accepted or rejected. If the
application was accepted, this notice will indicate that the estimation of the cost recovery fee
was published on eFiling.
A ‘reconfirmation’ is a re-application for a prior binding ruling issued by the ATR Unit, the
validity period of which has expired. Provided the facts remain the same, the applicant may
request that the ruling should be reconfirmed for a further period. Reconfirmations are
applications for binding rulings and all terms and conditions applicable to applications are
applicable to reconfirmations which include application fees.
A ‘ruling’ refers to a letter in the form of a complete written statement that SARS issues
through the ATR Unit of the Legal and Policy Division: Interpretation and Rulings. It sets
forth SARS’s interpretation of the relevant tax laws and how they would apply to the
proposed transaction it describes.
2
An application may not be accepted unless sufficient time is available for the issuing of a binding
ruling before the transaction date.

Generally, a ruling (in the case of a BCR or a BPR) includes –
 a statement identifying it as a BCR or BPR made under section 78;
 the name, tax number and postal address of the applicant;
 a list or a description of the affected class members in the case of a BCR;
 the relevant statutory provisions and legal issues;
 a description of the proposed transaction;
 the specific ruling made;
 any assumptions made or conditions prescribed by SARS in connection with the
validity of the ruling; and
 the period for which the ruling is valid.
An ‘SMME’ for purposes of the reduced fee is defined as –

(a) any person, excluding a listed company, if the gross income for the most recent year
of assessment did not exceed the amount prescribed in the definition of a ‘small
business corporation’ under section 12E(4)(a)(i) of the Income Tax Act; and
(b) in respect of applications for VAT rulings only, any partnership, where the gross
income for the most recent year of assessment did not exceed the amount
prescribed in the definition of a ‘small business corporation’.
1.2.2 The ATR process in a nutshell

Generally, the ATR process involves a number of steps, beginning with the submission of an
application and ending with a ruling issued by the ATR Unit and its publication by SARS in
edited form.
These steps are summarised below:

 Filing the application form. The ATR process begins with the filing of the
application forms and the payment of the application fee. The application forms must
be submitted electronically and the payment of the application fee must also be made
through the SARS eFiling system. An e-Application that is filed without payment of
the application fee will expire in 10 days. If there is any uncertainty as to whether a
rejection may apply, applicants are welcome to lodge the online application and
upload the application documentation for evaluation before payment of the
application fee.
 Pre-screening checklist. The first form that must be completed is the pre-screening
checklist which helps to ensure that your application is eligible for the ATR process
and that it is not subject to a rejection.
 Contact details and other basic information. The remaining application forms
permit SARS to obtain contact information about you and your authorised
representative, if any. It also enables SARS to identify the general areas of the tax
laws at issue in order to expedite the assignment of your application to a specialist
and the processing of your application.

 Confirmation and reference number. Once you have successfully submitted the
pre-screening checklist as well as the application forms, you will receive an electronic
confirmation. Your confirmation will also include a reference number to be used in
your further communication with SARS with regard to the application.
 Supporting information and other required items. In terms of section 79, you
must also provide detailed supporting information and other required items in
connection with your application. You must submit this information within five
business days of the date of the electronic confirmation unless an extension is
granted in writing.
 Review of application. Once the supporting information and other required items
have been received, the application will be assigned to a specialist. The specialist will
review your application more comprehensively to ensure that none of the rejection
criteria apply.
 Notice of acceptance. Upon completion of this review, the specialist will notify you
within five business days of completion of the submission requirements whether or
not your application has been accepted. If the application was accepted, this notice
will indicate that the estimation of the cost recovery fee was published.
 Estimated cost recovery fee. The specialist will provide you with an online estimate
of the cost recovery fee. Work in connection with your application cannot begin until
you have read and accepted the Letter of Engagement as well as electronically
accepted the estimated cost recovery fee and made the advance payment that was
calculated as a percentage of the highest estimated cost recovery fee (normally
20%).
 Letter of Engagement. Upon acceptance of the estimated cost recovery fee, you
must indicate that you have read and accepted the Letter of Engagement by ticking
the relevant box. The engagement letter is a binding contract between you and
SARS that sets forth the basic terms and conditions that govern the rulings process,
including your acceptance of the estimated fee and agreement to make the advance
and final payments.
 Substantive review. Once these requirements have been satisfied, the specialist will
proceed with the substantive review of your application. During this process, the
specialist may request additional information from you in connection with your
application. A breakdown of the review is provided in Annexure D. A ruling
application may still be rejected during the review process if it becomes apparent that
an exclusion or rejection criterion is applicable.
 Meeting with the specialist. During the review process, you or the specialist may
request a meeting to discuss and clarify the issues raised or the proposed
transaction itself.. Note that meetings will not be held before the documentation has
been uploaded, or a draft application has been provided, and no indication of
whether the ruling will be positive or negative will be given.
 Status checks. You will be able to check the status of your application on the eFiling
system throughout the review process or you can email ATRInfo@sars.gov.za.

 Notice of proposed ruling. Upon completion of the review process, you will be
notified online of SARS’s proposed ruling in response to the issues raised in your
application. The proposed ruling may be positive or negative.
 Proposed positive ruling. If the ruling is positive, you will be provided with a
draft of the proposed ruling. You must review the draft ruling carefully for
accuracy and inform SARS of any errors or omissions you believe may have
been made.
 Proposed negative ruling. If SARS intends to issue a negative ruling, you
will be notified and given an opportunity to discuss the matter with the
specialist. If a final decision is taken to issue a negative ruling, you will be
given the option to –
1. request that the ruling not be issued and to withdraw the application
online after filing a notice to discontinue; or
2. in certain limited cases, to amend the application to address those
aspects of the proposed transaction that have given rise to the
problem.
In either event you will remain liable for the work done on your application.
In particular, any application fees paid will not be refunded and any
outstanding costs incurred up to the date that the notice to discontinue is filed,
must be paid.
Both cases may necessitate a revision of the original estimated cost recovery fee
published. The specialist will inform you if necessary.
 Issuance of the ruling. Once all of the foregoing steps have been completed, the
ruling will be issued to you online and upon your request, sent to the address shown
on your application. The request must be received no later than the date upon which
you approved the final ruling.
 Validity period of the ruling. The ruling will be valid for a specific period.
A reconfirmation can be requested, provided the facts have remained the same. It is
in most cases unnecessary to request an extension even if the period over which the
ruling is applied exceeds the validity period. For example, if a ruling has been
requested on section 12D of the Income Tax Act and the write down of the value of
the asset is limited to 5% per year, the ruling may be valid for five years, but the cost
will be written off over 20 years. SARS will not change the write down period after the
ruling has expired unless circumstances would justify a withdrawal of the ruling.
In that event SARS will communicate the circumstances and its conclusions to the
applicant as if the ruling were in force.
 Publication of the ruling in edited form. If an ATR is issued to you, the final step
involves the publication of the ruling in edited form (published ruling). You will also be
provided with a draft copy of the edited ruling online for review and comment.
You must review this draft carefully and notify SARS if you believe it contains any
inaccuracies or other confidential information that should be deleted. SARS must
consider, before publication, any comments and proposed edits and deletions
submitted by you. In the event of a dispute, SARS’s determination in respect of the
content of the published ruling is final.

The following steps must be taken if you are applying for a reconfirmation:
 Access the SARS eFiling system and apply online again following the normal
application process.
 Pay the applicable application fee.
 Within five business days, submit a reconfirmation request together with a motivation
as to the reason why the reconfirmation should be granted. This motivation must
address both the question whether or not the background circumstances have
changed and the reason why in this instance an extension is in fact necessary from
the applicant’s perspective.
2. General information
2.1 Tax Acts (tax laws) to which the ATR system applies
SARS may issue an advance ruling on any provision of a ‘tax Act’ as defined in the TA Act,
subject to the rejections contained in section 80 of the TA Act.
2.2 Application for an ATR

Any natural person, company, trust or estate who is, or intends to be, a party to a proposed
transaction may apply for a binding ruling in connection with that transaction. An applicant
does not have to be a ‘resident’ as defined in section 1(1) of the Income Tax Act, or subject
to tax in South Africa at the time of application.
A representative, such as a lawyer or accountant, may file an application on behalf of a

client. The representative applying on behalf of the applicant must submit a Power of
Attorney or an equivalent written statement, signed by the applicant, authorising the
representative to file the application and to represent the applicant in the ruling process.
An application may not be filed by a person who is not, or does not intend to be, a party to
the proposed transaction in question, except in a representative capacity.
2.2.1 Special rule for partnerships

A partnership may not apply for a BPR for income tax purposes, as a partnership is not
‘person’ for income tax purposes, but the individual partners may do so. A partnership may
apply for a BPR on behalf of the individual partners to whom the proposed transaction
relates. A partnership may also apply for a BPR in respect of any other taxes referred to in
2.1. In the case of a BPR application for VAT purposes, the partnership is or may become a
registered vendor and may thus apply for a BPR. Partnerships may apply on behalf of a
class for a BCR relating to all taxes.
2.2.2 Special rules for certain applicants who are not resident
If the applicant is an individual or company that is not a resident that considers a business or
investment venture in South Africa, they may not have a South African identification or tax
registration number when the application is submitted. For this reason, the online application
process includes a special form to be used in these instances. This form requires applicants
to provide their taxpayer identification numbers from their country of residence in lieu of a
South African identification or tax registration number.

In addition, the SARS eFiling system can only accept payment of the application fee from an
account with one of four South African Banks: ABSA, First National Bank, Nedbank and
Standard Bank. If your application is being filed by a local representative, the eFiling system
can accept a payment made on your behalf through an account at one of those banks held
by them. If applicants are filing the application on their own behalf, special procedures are
available to make payment. Specific instructions are available on the SARS eFiling website.
2.2.3 Rules for BCR and BPR applications

More than one ‘applicant’
Section 81(4) provides that if there is more than one applicant in respect of a proposed
transaction SARS may, upon request by the applicants, impose a single prescribed fee in
respect of the application.
SARS will therefore accept an application with an applicant and co-applicant(s), for example
in situations involving companies proposing to conclude a transaction which may qualify the
parties for the intragroup relief provided for by section 45 of the Income Tax Act.
Section 79(2) provides that more than one applicant must designate a lead applicant to
represent the co-applicants.
BPR or BCR
In order to clarify if application should be made for a BCR or a BPR, the following scenarios
are provided:
Although two parties (for example, company A and an Special Purpose Vehicle (SPV)
embodying a share investment scheme) are parties to the same transaction, a binding
private ruling application must be filed by company A and a binding class ruling application
must be filed by the share investment scheme as the representative of the investors. The
interpretation and application of the tax laws are different for each of them. Where the two
parties are thus parties to the same transaction one application on e-filing will not suffice as
two rulings, that is, one BPR and one BCR, must be issued. Only one applicant in the form
of a class can apply for a BCR so there are no co-applicants in a BCR.
By way of another example: Company A proposes to pay bursaries to employees, they

request a ruling that the payment will be deductible for company A and that the bursaries will
not be gross income for the employees. A BPR will be issued for company A and a BCR for
the employees. The company also has the option to only apply for a ruling on the deduction
to withhold employee’s tax. In such a case the company will have to apply for a BCR on
behalf of the employees.
If different transactions take place, although they could be part of the same overall scheme,
two different ruling applications will be required. For example, a company requires a ruling
on whether tips received from customers by employees, that are held by the company for
safekeeping and subsequently paid over to employees, subject to certain conditions, will
constitute gross income for the company. In addition a ruling is requested as to whether the
amount paid over to the employees will constitute ‘remuneration’ as defined in paragraph 1
of the Fourth Schedule to the Income Tax Act. The payment to the employees is a
consequence of the initial tips received, but also arise from a separate transaction (payment
to the employees), thus two applications are required.

2.2.4 Meaning of ‘transaction’ and the scope of advance rulings – section 77
A ‘transaction’ is defined to mean any transaction, deal, business, arrangement, operation or
scheme and includes a series of transactions. This definition excludes, for example, a
request for a ruling on the determination of the amount to be included or deducted in the
determination of taxable income in the case of the allowance under section 11(j) of the
Income Tax Act if the transaction, the acquisition of a loan, happened in the past.
Rulings will for example be issued to an applicant that requested a ruling on the period over
which a specific asset, which will be acquired after the ruling has been issued, can be written
off.
There is no express statutory requirement that the proposed transaction may not be entered
into before the ruling is issued, but it is arguably the implication. Applicants are therefore
strongly advised to discuss the possibility of implementation of the proposed transaction with
the ATR Unit of SARS in an appropriate case before the ruling is issued.
2.3 Fees – section 81

An application for a binding ruling is subject to both an application fee and a cost recovery
fee.
The maximum amount of the application fee may not be exceeded unless –
(a) the applicant amends the application; or
(b) a new issue arises or is identified during the ruling process.
In the event that a revised estimated fee is necessary in either of these situations, the
applicant will be notified and given an opportunity to discuss the revised estimate.
If an applicant fails or refuses to accept a revised estimated fee, the application may be
rejected without any refund, waiver or abatement of any fees paid or incurred up to that
point.
2.3.1 Application fee

In order to file an application for a binding ruling, you must pay an application fee. This fee
must be paid when you file your application. Except in rare instances, with the prior approval
of SARS, the application fee must be paid online through the SARS eFiling system. Special
procedures are also available for applicants who do not have a South African bank account.
Specific instructions are available on the SARS eFiling website.
Categories of Estimation Estimated Time

Estimated Fee Range Hourly rate
Applications Deposit to Complete
Standard R10 000 to R35 000 R7 000 R650 20 days
Involved R35 000 to R70 000 R14 000 R650 45 days
Complex R70 000 to R105 000 R21 000 R650 60 days
Extraordinary Case-by-case Case-by-case R650 Case-by-case
Urgent applications Case-by-case Case-by-case R1 000 Case-by-case

The application fee for an SMME is currently R2 500 in respect of a BPR and a BCR.
The application fee for all other applicants is R14 000. The application fee is non-refundable,
except in extraordinary circumstances.
Reconfirmation applications are subject to an application fee as well as a cost recovery fee
based on the complexity levels of the specific reconfirmation required.
2.3.2 Cost recovery fee

Your application is also subject to a cost recovery fee, based upon the number of hours that
it takes to consider the issues raised in your application, as well as any direct costs incurred
in connection with the issuing of the ruling. These direct costs could include travel costs, for
example, where a visit to your operations might be helpful. It could also include the costs
incurred in obtaining the services of a consultant or expert, for example, an engineer or a
scientist, when necessary to advise upon technical aspects of a proposed transaction.
The amount of the cost recovery fee depends upon several factors. These factors typically
include the number and complexity of the issues raised, the complexity of the proposed
transaction itself and the volume of agreements, documents and other information that must
be reviewed in connection with the application.
A cost recovery fee will also be charged for a reconfirmation and an extension application.
The fee would be based on the complexity of the reconfirmation required.
The procedures and requirements in connection with the cost recovery fee are discussed in
more detail in 4.4.
3. Rejections
3.1 General overview
The TA Act imposes certain limits upon the issues in respect of which you may request a
BPR or BCR. These limitations require the rejection of applications that do not qualify for
consideration.
Rejections generally address four basic areas of concern:

 The impossibility of addressing fact-intensive issues through the ATR system.
 The need to have a complete picture of a proposed transaction before a ruling can be
issued.
 The need to allocate limited resources in the most efficient and effective way
possible.
 Certain basic policy issues in connection with the proper role of the ATR system.
These limitations are discussed in more detail in 3.1.1 below.
Note:
1. It is your responsibility to consult this list before submitting an application.
2. If you submit an application and it is subsequently determined that the application
requests or requires a ruling in connection with an issue that was identified in this list at
the time the application was submitted, the application will be rejected without any refund
of the application fee.

3.1.1 Rejections – section 80(1)
SARS may reject an application for an ATR in connection with certain matters.
The exclusions and refusals apply to the applications listed below and are discussed in detail
under (a) to (u) of this paragraph:
 An application requesting an opinion, conclusion or determination regarding –
 the market value of an asset;
 the application or interpretation of the laws of a foreign country;
 the pricing of goods or services supplied by or rendered to a connected
person in relation to the applicant or a class member;
 the constitutionality of a tax Act;
 a proposed transaction that is hypothetical or not seriously contemplated at
the time the application is filed;
 a matter which can be resolved by SARS issuing a directive under the Fourth
or Seventh Schedule to the Income Tax Act;
 whether a person is an independent contractor, labour broker or personal
service provider; or
 an application that is submitted for academic purposes.
 An application that contains –
 a frivolous or vexatious issue;
 alternative courses of action by the applicant or class member not seriously
contemplated; or
 an issue that is the same as or substantially similar to an issue that is –
o currently before SARS in connection with an audit, investigation or
other proceeding involving the applicant or a class member or any
connected person in relation to the applicant or any class member;
o the subject of a policy document or draft legislation that has been
published; or
o subject to dispute resolution under Chapter 9 of the TA Act.
 An application that involves the application or interpretation of a general or specific
anti-avoidance provision or doctrine.
 An application that involves an issue –
 that is of a factual nature;
 the resolution of which would depend upon assumptions to be made
regarding a future event or other matters which cannot be reasonably
determined at the time of the application;
 which would be more appropriately dealt with by the competent authorities of
the parties to an agreement for the avoidance of double taxation;
 in which the tax treatment of the applicant is dependent upon the tax
treatment of another party to the proposed transaction who has not applied
for a ruling;

 in respect of a transaction that is part of another transaction which has a
bearing on the issue, the details of which have not been disclosed; or
 which is the same as or substantially similar to an issue upon which the
applicant has already received an unfavourable ruling.
 An application that involves a matter the resolution of which would be unduly time-
consuming or resource intensive.
 An application that requests SARS to rule on the substance of a transaction and
disregard its form.
In addition to the above, an application may also be rejected in respect of an issue identified
by SARS and which must be published in the Government Gazette.
There are several reasons for these rejections. The most important reasons are as follows:
 The ATR system is designed to provide taxpayers with certainty in respect of SARS’s
view on questions of tax law. It is not designed or appropriate for the resolution of
questions of fact. Facts can only be established after a transaction has been
completed and any factual issues must be resolved through the audit process;
 Many important tax issues involve the application or interpretation of the tax laws to
the facts of a proposed transaction. Applications for rulings in connection with those
issues generally do not present a problem. However, some issues are of an
inherently or distinctly factual nature.
 SARS must ensure that limited resources are put to the best possible use. For this
reason the ATR system is limited to providing guidance in respect of proposed
transactions that are seriously contemplated at the time the application is filed.
Further, the resolution of an issue may depend upon matters that cannot reasonably be
determined at the time the application is filed or upon the tax treatment of another party to
the transaction who has not applied for a ruling.
An application in which the applicant fails or declines to provide additional information that
has been requested by SARS in connection with the application may be rejected without
refunding the application fee imposed under section 81.
Notes:
1. Any example that is given is for informational purposes only and is intended solely to
illustrate the types of situations in which these rejections may be applied. Due to the
nature of these discretionary rejections, any determination in respect of an actual
application must be made exclusively on a case-by-case basis after a careful review of
the application itself.
2. It is your responsibility to ensure that any statements made are true and accurate.
3. These statements remain subject to review and verification upon audit.
4. It is also your responsibility to disclose any facts that would likely raise a serious concern
in respect of an anti-avoidance rule. If you fail to do so, SARS may reject your
application upon the discovery of those facts at any point in the review process. If this
occurs, you will remain liable for payment for the work done on the application up to the
date of rejection. Application fees paid will not be refunded and any outstanding cost
recovery fee incurred up to the date of rejection must be paid.

5. If it is subsequently determined that material statements were not true or accurate, the
ruling will be rendered void from the time it was issued in accordance with section 84.
For more detailed information in connection with this issue, see 5.2.1.
(a) An application requesting the rendering of an opinion, conclusion or

determination regarding the market value of an asset – (section 80(1)(a)(i)
This exclusion would apply to an application that requests or requires a determination –
 of the current market value of assets you own, for example, your home, shares etc;
 of the market value of any financial instrument or other asset for purposes of
determining whether or not a company constitutes a ‘domestic financial instrument
holding company’ or ‘foreign financial instrument holding company’ as defined in
section 41(1) of the Income Tax Act; or
 that an asset has been disposed of at fair market value for purposes of donations tax.
Situations in which this exclusion or refusal may not apply

Generally, the exclusion or refusal does not apply if the application merely contains a
statement in respect of the market value of an asset but does not request or require a
determination in respect of that matter. Thus, the exclusion or refusal would generally not
apply to a situation in which the market value of an asset is relevant to a requirement or
prerequisite under a particular statute, but the application does not request or require a
ruling in connection with –
 that requirement or prerequisite itself; or
 the actual market value of the asset.
Similarly, the exclusion or refusal would generally not apply where a statement in respect of
the market value of an asset merely provides helpful or useful background information in
connection with the ruling request.
Example 1
An applicant may request a ruling in connection with a proposed company formation
transaction in which the applicant disposes of an asset to a company and becomes entitled,
in exchange for that asset, to other considerations in addition to equity shares issued by the
company. The issue raised is limited to the treatment of that other consideration.
The company formation provisions only apply to transactions in which the market value of an
asset exceeds its base cost at the time of the disposal. In this situation, the application may
include a statement that this requirement is satisfied or that the market value of the asset will
exceed its base cost at the time of the transaction.

(b) An application requesting an opinion, conclusion or determination regarding
the application or interpretation of the laws of a foreign country –
section 80(1)(a)(ii)
This exclusion would apply to an application that requests or requires a determination that –
 a company is (or is not) a resident of a foreign country under that foreign country’s
rules for determining residency;
 certain periodic payments to be made by a foreign company would (or would not) be
subject to a withholding tax imposed by that foreign country; or
 a particular amount that is received by or accrued to a foreign company would (or
would not) constitute an item of gross income under the income tax laws of that
foreign country.
Situations in which this exclusion or refusal might not apply

This exclusion or refusal does not apply if the application merely contains a statement in
respect of a particular issue under foreign law but does not request or require a
determination in respect of that matter. Thus, the exclusion or refusal generally would not
apply to a situation in which a question of foreign law is relevant to a requirement or
prerequisite under a particular statute, but the application does not request or require a
ruling in connection with –
 that statutory requirement or prerequisite; or
 that question of foreign law itself.
Similarly, the exclusion or refusal would not apply where a statement in respect of the
question of foreign law merely provides helpful or useful background information in
connection with the ruling request.
For example, an applicant may request a ruling in connection with the application of rebate
carry-forward provisions of section 6quat(1B) of the Income Tax Act in respect of a particular
tax imposed by a foreign country. In this situation the applicant may include a statement that
the tax in question will not be subject to any right of recovery by any person for purposes of
section 6quat(1C).
(c) An application requesting an opinion, conclusion or determination regarding

the pricing of goods or services supplied by or rendered to a connected
person in relation to the applicant or class members – section 80(1)(a)(iii)
This exclusion would apply to an application that requests or requires a determination that –
 the price to be charged by the applicant for goods it may sell to a foreign subsidiary
would reflect an arm’s length price as contemplated by section 31 of the Income Tax
Act;
 the price to be charged by the applicant for services it will supply to a controlled
foreign company owned by it, would reflect an arm’s length price as contemplated by
section 9D(9)(b)(ii) of the Income Tax Act; or
 the consideration to be charged by the applicant in connection with a proposed
disposal of an asset to a connected person in relation to the applicant reflects an
arm’s length price as contemplated by paragraph 38(1) of the Eighth Schedule to the
Income Tax Act.

In particular, you may not use the ATR system to request an advance pricing agreement or
its equivalent.
Situations in which this exclusion or refusal might not apply

This exclusion or refusal does not apply if the application merely contains a statement in
respect of the pricing of goods or services but does not request or require a determination in
respect of that matter. Thus, the exclusion or refusal would not apply to a situation in which
the pricing of goods or services is relevant to a requirement or prerequisite under a particular
statute, but the application does not request or require a ruling in connection with –
 that requirement or prerequisite itself; or
 the pricing itself (for example, whether it actually reflects an arm’s length price or the
fair market value of an asset or service).
Similarly, the exclusion or refusal generally would not apply where a statement in respect of
the pricing merely provides helpful or useful background information in connection with the
ruling request.
(d) An application requesting an opinion, conclusion or determination regarding

the constitutionality of any tax law – section 80(1)(a)(iv)
This exclusion also applies to any application that contains or includes a statement or
assumption that a tax law is unconstitutional.
There are no exceptions to this rule.
(e) An application requesting an opinion, conclusion or determination regarding a

proposed transaction that is hypothetical or not seriously contemplated –
section 80(1)(a)(v)
‘Hypothetical’ transactions would include ones that are merely conjectural, theoretical or
proposed simply for possible further investigation or consideration. For example, this
exclusion would apply to any application that –
 indicates that the applicant is considering a possible investment in the film industry at
some future date, but has no specific plans to do so at present and is simply
interested in the potential tax consequences of doing so;
 relates to a very general possible transaction, but none of the other parties have
been identified and all or most of the specific terms of the transaction are vague or
subject to substantial uncertainty; or
 indicates that the applicant is merely ‘thinking about’ or ‘considering’ a possible
transaction or course of action but has no definite plans to do so at present.
(f) An application requesting a ruling on a matter which can be resolved by SARS

issuing a directive under the Fourth or Seventh Schedule of the Income Tax
Act – section 80(1)(a)(vi)
Matters can be resolved more easily and speedily by the issuing of a directive than through
the ATR process. Directives are also binding on the Commissioner and it is not expected of
taxpayers to pay a fee for a directive. Because of the factual nature of application for
directives, ATR applications may also be rejected based on section 80(1)(d)(i).

(g) An application relating to the duty of an employer to determine whether a
person is an independent contractor, labour broker, or personal service
provider – section 80(1)(a)(vii)
This issue is both fact and resource intensive. In addition, it is only the employer who has full
knowledge of those facts.
(h) An application that is submitted for academic purposes – section 80(1)(a)(viii)

This exclusion would apply to any application submitted by a –
 professor in connection with a scholarly article on an aspect of the VAT Act;
 tax practitioner in connection with the preparation of a scheme to minimise the tax
liability of the tax practitioner’s clients in a particular industry;
 student in connection with a thesis.
(i) An application that presents, contains, or raises a frivolous or vexatious

issue –section 80(1)(b)(i)
Frivolous issues would include questions with answers that are completely obvious under
the plain language of the statute, for example, an application by a resident requesting a
ruling that ordinary wages paid as consideration for services performed in South Africa are
gross income. Vexatious issues would include a request for a determination that a particular
tax law is unfair and should be repealed (or that, despite its applicability to the proposed
transaction, it should not be enforced because of the hardship which doing so would entail to
the applicant).
(j) An application that presents, contains, or raises alternative courses of action

by the applicant (or requesting an opinion, conclusion or determination
regarding such alternative courses of action) – section 80(1)(b)(ii)
This exclusion would apply to an application that sets forth various ways or methods for
entering into or carrying out a proposed transaction and seeks, directly or indirectly, SARS’s
advice in respect of how the proposed structure should be arranged. It would also apply to
an application that sets forth a proposed course of action but further requests, in the event of
an adverse ruling, that SARS advises or suggests different alternatives that would remedy
the problem(s). The function of the ATR system is to provide binding rulings on the specific
tax treatment proposed by the applicant on the proposed transaction. It does not provide
applicants with tax or legal advice in respect of how to structure possible transactions.
Situations in which this exclusion or refusal might not apply (guidance in respect of
consequential issues in the event of an adverse ruling on a primary issue)
In certain circumstances, an applicant may be committed to pursuing a business transaction
even in the event of an adverse ruling in connection with a particular issue. In these
situations, an adverse ruling in respect of a primary or threshold issue is likely to have
significant implications and may raise new or different issues in connection with the
proposed transaction. In these limited circumstances, the exclusion or refusal would not
apply to an application that seeks a ruling in connection with such issues.

Example 2
A company is planning to begin a joint venture in a foreign country and wants to pursue this
venture through a particular type of entity organised under the laws of that country. In this
context, the applicant may request a ruling that the foreign entity would be a ‘company’ for
purposes of the Income Tax Act and then request a ruling in respect of the application of the
definition of the term ‘participation rights’ in section 9D(1) to the applicant’s ownership
interest in that entity. In addition, in the event of an adverse ruling in respect of this primary
issue, the applicant may, in the alternative, request rulings that the foreign entity would be a
partnership and that the applicant would be a partner subject to the provisions of
section 24H.
This exception only applies to situations in which the applicant is firmly committed to
pursuing the course of action to which the primary or threshold issue relates. Thus, for
example, the exception would not apply to an application if it indicates that the applicant
intends to use a particular foreign entity for a joint venture in another country, but only if that
entity is classified as a partnership for South African income tax purposes, and that, in the
event of an adverse ruling, it is considering the use of entities in connection with the
transaction, depending upon the South African tax treatment of each one.
(k) An application that presents, contains, or raises an issue that is the same as or
substantially similar to issues which are potentially or actually in dispute –
section 80(1)(b)(iii)
SARS may reject an application if it requests or requires a determination in respect of the
following:
(i) An issue that is currently before SARS in connection with an audit,
examination, investigation or other proceeding involving the applicant or a
connected person in relation to the applicant or a class member –
section 80(1)(b)(iii)(a)
This is a material fact that must in any event be disclosed in the application. No
exceptions to this rule will be allowed. It is not appropriate for the ATR system to
serve as an alternative dispute resolution channel.
This issue is discussed in more detail in 4.2.6.
(ii) An issue that is the subject of a policy document or draft legislation that has
been published – section 80(1)(b)(iii)(bb)
SARS will not accept an application that requests a ruling in connection with the
application or interpretation of any proposed legislation before its promulgation.
In addition, SARS will not accept applications that request or require rulings in
respect of existing tax laws that are the subject of proposed amendments following
the release of those amendments for comment, either to the public generally or to
industry groups. If a proposed amendment is to be retrospective in effect,
applications will not at all be accepted in respect of proposed transactions that would
be entered into or carried out subsequent to the proposed effective date of that
amendment.

Situations in which this exclusion or refusal might not apply (specific cases of
compelling need)
In specific cases of compelling need, SARS may agree to accept an application that
requests a ruling in respect of current law following the release of a policy document
or proposed amendment for comment if –
 the proposed transaction will be entered into or carried out before the
anticipated effective date of the policy or proposed amendment; and
 the request seeks a ruling solely in respect of the application or interpretation
of the current law.
Determinations will be made on a case-by-case basis.
Example 3
An applicant may request a ruling in respect of the treatment of certain aspects of a
proposed black economic empowerment (BEE) transaction. A proposed amendment to the
governing tax law has been released for comment, but the proposed transaction would be
completed before the anticipated effective date of that amendment. The main financing party
will not commit to provide financing for the transaction unless a favourable ruling is received
in respect of this issue. The applicant seeks a ruling solely in respect of the application or
interpretation of the current law. In these circumstances SARS would consider accepting the
application.
(iii) An issue that is subject to dispute resolution under Chapter 9 of the TA Act –
section 80(1)(b)(iii)(cc)
SARS may reject an application if it raises or presents an issue that is the same as or
substantially similar to an issue currently pending before the courts.
(l) An application requesting the application or interpretation of any general or

specific anti-avoidance provision or doctrine – section 80(1)(c)
There are several important reasons for this rejection. One is that the application of these
anti-avoidance rules is often extremely fact-intensive and cannot be undertaken until a
transaction has actually been entered into or carried out. Another is the danger that the
ruling process might be abused in an attempt to probe for loopholes in these rules or to
develop ‘roadmaps’ for new abusive avoidance schemes.
In practice, this rejection would be applied in two specific situations. It involves any
application –
 that requests or requires a ruling specifically in respect of the application or
interpretation of an anti-avoidance rule itself; or
 in respect of a proposed transaction that would raise serious concerns under an anti-
avoidance rule if it were to be entered into or carried out in the manner described in
the application.

Example 4
An applicant requests a ruling as to whether or not a proposed multi-step transaction would
be considered an ‘arrangement’ for purposes of sections 80A or 103(2) of the Income Tax
Act.
Example 5
An applicant requests a ruling in respect of how the ‘abnormality requirement’ in section 80A
of the Income Tax Act would be interpreted and applied in connection with a proposed
complex series of transactions resulting in a significant tax benefit.
Example 6
An applicant requests a ruling as to whether or not the obtaining of a tax benefit would be
the sole or main purpose of a proposed transaction for purposes of section 80A of the
Income Tax Act.
Example 7
An applicant requests a ruling as to whether or not a proposed transaction in connection with
the sale of shares in a foreign subsidiary and a possible subsequent disposal of the
proceeds from that sale would constitute a ‘transaction, operation or scheme’ for purposes of
paragraph 64B(3)(c)(iii) of the Eighth Schedule to the Income Tax Act.
Example 8
An applicant requests a ruling as to whether or not a proposed transaction involving an
‘instrument’ (as defined in section 24J(1) of the Income Tax Act) and subsequent payments
to a connected person in relation to the issuer of that instrument would constitute a
‘transaction, operation or scheme’ for purposes of the proviso to the definition of the term
‘yield to maturity’ [also in section 24J(1)].
Example 9
An applicant requests a ruling in respect of its right to claim capital allowances under
section 12C of the Income Tax Act in connection with its acquisition of an aircraft.
The financing of the acquisition involves a series of steps and the use of a number of
complex financial derivatives. The net effect of these various steps and financial derivatives
is to create a circular flow of cash among the parties to the proposed transaction that is
routed through a tax indifferent party and results in a substantial inflation of the cost of the
aircraft. These aspects of the proposed transaction were not disclosed in the application and
were not evident from the information provided. Upon discovery of these elements, SARS
may reject the application under this exclusion. A similar result would apply if the applicant
had failed to disclose any steps in, or parts of, the proposed transaction that would have
given rise to the circular flow of cash. In this situation, the applicant remains liable for the
work done on the application. The application fee paid may not be refunded and any
outstanding cost recovery fee incurred up to the date of rejection must be paid.

Situations in which this rejection might not apply
SARS would not apply this rejection if the application merely contains a statement that
provides information that may either be required or helpful in connection with the application.
For example, an application that requests a ruling as to whether or not a proposed transfer
of assets from one company group to another would constitute an intra-group transaction
under section 45(1) of the Income Tax Act, would not be rejected simply because it includes
a statement that the proposed transaction is not part of a larger transaction, operation or
scheme.
(m) An application regarding an issue that is of a factual nature – section 80(1)(d)(i)

The ATR system is designed to provide taxpayers with certainty in respect of SARS’s view
on questions of the law. It is not designed or appropriate for the resolution of questions of
fact. Facts can only be established after a transaction has been completed and any factual
issues must be resolved through the audit process.
Many important tax issues involve the application or interpretation of the tax laws to the facts
of a proposed transaction. Applications for rulings in connection with such issues generally
do not present a problem. However, some issues are of an inherently or distinctly factual
nature. It is issues of this kind to which this exclusion may be applied.
Example 10
An applicant requests a ruling as to whether an amount to be received or accrued (or
expenditure to be incurred) would be of a revenue or capital nature in circumstances that
necessitate the determination of its intention on the basis of – amongst others – the
surrounding facts. The guiding principle is whether it would be necessary, in case of legal
proceedings to determine any dispute concerning the applicant’s intention, to cross-examine
the applicant on its evidence as to that intention.
Example 11
An applicant requests a ruling that the proposed activities of the applicant constitutes the
carrying on of a trade for purposes of section 11 of the Income Tax Act.
SARS may update the list in respect of additional considerations in order to identify specific
issues that are of an inherently or distinctly factual nature and would therefore be rejected
under this exclusion. It is the applicant’s responsibility to consult the list before submitting an
application. If an applicant requests a ruling in connection with an issue that has been
identified as an inherently or distinctly factual one, the application may be rejected without
any refund of the application fee.
Situations in which this rejection may not apply

SARS would not apply this rejection if the application merely contains statements that
provide required or helpful information in connection with the proposed transaction. For
example, an application would not be rejected because it contains a complete description of
the facts in respect of a proposed transaction as required by section 79(4).

SARS will also not apply this rejection if the application raises a question of law and the
factual matters are merely incidental or subsidiary to the resolution of that legal issue. In
these situations, the ruling would only reflect the application or interpretation of the law in
respect of the facts that are presented in the application – it would not be issuing a ruling or
determination in respect of the facts themselves.
Finally, SARS may issue a ruling in connection with a legal issue that is –
 dependent upon a particular set of facts; and
 those facts are clear, straightforward and basic to the application or interpretation of
the tax law in respect of the proposed transaction. Again, in these situations, the
ruling would only be applying and interpreting the tax law to the facts presented and
would not be making a ruling or determination in respect of those facts.
Example 12
An applicant is engaged in manufacturing motor vehicles and is proposing to acquire and
install a new, state-of-the-art CAD/CAM system in order to increase the efficiency and
reduce the costs of its manufacturing operations. In connection with its application the
applicant submits various marketing, technical and training materials that describe the
function and operation of the new system in detail. The applicant requests a ruling that the
CAD/CAM system would constitute machinery used by the applicant directly in the process
of manufacture for purposes of section 12C of the Income Tax Act.
Example 13
The applicant is proposing to enter into a complex, multi-step transaction in connection with
a proposed broad based black empowerment scheme. As part of this transaction, the
applicant is proposing to transfer certain assets to a subsidiary in which it will hold at least
70% of the shares at the time of the transfer. The applicant requests a ruling that the
proposed transfer would qualify as an ‘intra-group transaction’ for purposes of section 45 of
the Income Tax Act.
(n) An application regarding an issue, the resolution of which would depend upon
assumptions of future events or other matters that cannot be reasonably
determined at the time of the application – section 80(1)(d)(ii)
Under this exclusion, an application would generally be rejected if the resolution of the issue
depends upon a future action of another person unless that person is a party to the
proposed transaction. In addition, an application would generally be rejected if the resolution
of the issue depends upon future events that are beyond the control of the applicant or other
parties to the proposed transaction.
Example 15
An applicant requests a ruling that the ring-fencing provisions of section 20A of the
Income Tax Act would not apply to assessed losses from a proposed new trade. The trade in
question is not one of those identified in section 20A(2)(b) of that Act. In these
circumstances, the application of the ring-fencing provisions would depend upon, among
other things, whether or not the applicant will incur assessed losses from that trade in future
years. This fact is beyond the control of the applicant and cannot be determined at the time
the application is made. Accordingly, the exclusion would apply and the application would be
rejected.

Example 16
An applicant proposes to rent premises with the intention to develop them by building an
office park. It then proposes to let the office space to prospective tenants. It seeks rulings
regarding allowances it proposes to claim under sections 11(g) and 11(h) of the Income Tax
Act. In order to be able to claim the allowances the applicant proposes to enter into leases
with prospective tenants and with the landowner upon certain specific terms it sets forth in
the application. If those terms are indeed agreed upon the application will be successful.
SARS will however have to assume that in the foreseeable future all of those parties will
agree to enter into the proposed transaction on precisely the terms the applicant states it will
seek to secure. Although the applicant therefore proposes a transaction, SARS will be
unlikely to make all of the assumptions necessary to result in a successful application in this
instance. The applicant would have to identify the parties who, ideally, should as far as
possible be co-applicants. SARS will however not require the impossible. It would be easier
to join in the application with the landowner than with prospective tenants. The applicants will
also have to produce their proposed contract of lease and the lessee would have to produce
the standard terms upon which it will insist on subletting the office space. If at least one
proposed sub-lessee has already been identified, this will strengthen the applicant’s
prospects all the more. Otherwise SARS might accept the application and issue a positive
ruling on condition that the subleases are entered into strictly on the terms the applicant
proposes.
Situations in which this rejection may not apply

Under section 78(3), SARS may issue a binding ruling subject to conditions and
assumptions that are prescribed in the ruling. In certain situations, an application may
contain statements in respect of the future conduct of the parties that are directly relevant to
the issue raised in connection with the proposed transaction. In such a situation, SARS may
issue a ruling, but only on the condition that the future behaviour of the parties actually occur
strictly in accordance with the statements made in the application.
If an applicant subsequently fails to satisfy such a condition or assumption, the ruling will be
rendered void from the time it was issued in accordance with section 84(1)(c). For more
detailed information in connection with this issue, please read 5.2.1.
(o) An application regarding an issue which would be more appropriately dealt

with by the competent authorities of the parties to an agreement for the
avoidance of double taxation – section 80(1)(d)(iii)
SARS may reject an application regarding or in respect of an issue which would be more
appropriately dealt with by the competent authorities of the parties to an agreement for the
avoidance of double taxation.
(p) An application regarding an issue which is the same as or substantially similar

to an issue upon which the applicant has already received an unfavourable
ruling – section 80(1)(d)(vi)
The ATR system has limited resources and it is vital that these resources be allocated and
used as efficiently and effectively as possible. There is also no appeal against an
unfavourable ruling. A second or further application on similar issues by the recipient of a
prior unfavourable ruling can therefore amount to an abuse of the ATR process, which this
provision seeks to prevent.

Generally, this exclusion may be applied if –
 an applicant makes repeated applications in connection with recurring proposed
transactions; and
 there have been no material changes in the relevant facts or tax law since the prior
unfavourable rulings were issued.
(q) An application regarding an issue in which the tax treatment of the applicant is
dependent upon the tax treatment of another party to the proposed transaction
and that other party has not applied for a ruling – section 80(1)(d)(iv)
In certain complex multi-party transactions, for example, the resolution of an issue raised by
the applicant may depend upon the tax treatment of another party in connection with or as a
result of its participation in the transaction. This exclusion may be applied in such
circumstances.
Example 17
An applicant is a resident company and is a wholly-owned subsidiary of Holdco, another
resident company. Company X is also a resident company. Company X has several classes
of equity shares with differing rights, none of which are currently owned by the applicant or
Holdco. In a multi-step proposed transaction, Holdco proposes to acquire more than 70% of
some, but not all, of the different classes of equity shares issued by Company X. Upon
completion of this step, the applicant plans to transfer certain assets to Company X in order
to consolidate the operations of the two companies (the applicant and company X) and to
achieve certain economies of scale. In its application, the applicant requests a ruling that the
proposed transfer of assets constitutes an ‘intra-group transfer’ as defined in section 45(1) of
the Income Tax Act. In order for a transaction to satisfy that definition, however, the
applicant and Company X must be members of the same group of companies. The
resolution of that issue, in turn, depends upon whether or not Holdco will own at least 70% of
the total equity shares of Company X upon the completion of the first step. Under these
circumstances, the exclusion may be applied unless Holdco also submits an application in
connection with the ownership issue.
Example 18
An applicant applies for a ruling under section 11(g) of the Income Tax Act, but the party to
whom the right to have such improvements effected will accrue, is not party to the
application. The exclusion may be applied, unless the party to whom the right accrues is a
co-applicant in the application.
(r) An application regarding a proposed transaction that is part of another

transaction which has a bearing on that issue and the details of that other
transaction have not been disclosed – section 80(1)(d)(v)
SARS may reject an application if the applicant requests a ruling on an issue –
 in connection with a proposed transaction;
 that proposed transaction is part of another transaction;
 that other transaction has a bearing on the issue raised; and
 the details of that other transaction have not been disclosed.

Generally, this exclusion is likely to be a concern in complex multi-party, multi-step
transactions.
Example 19
The applicant, a resident company, is proposing to enter into an amalgamation transaction,
as contemplated in section 44 of the Income Tax Act, with another resident company,
Resultant. As part of this proposed transaction, the applicant will dispose of all of its assets
to Resultant solely in exchange for equity shares of Resultant and the assumption of the
debts of the applicant, some of which will have been incurred within 18 months of the
proposed transaction (‘recent debt’). The applicant requests a ruling that the assets disposed
of by it will qualify the applicant for full ‘roll-over’ relief under section 44, but does not
disclose the circumstances under which the recent debt was incurred. Whether or not the
applicant is entitled to full roll-over relief, however, depends upon the circumstances in which
such debt is incurred. Accordingly, this exclusion may be applied, unless the applicant also
discloses the details of those relevant transactions.
An applicant in this situation will be given an opportunity to provide the requisite information.
If the applicant still fails or refuses to provide the requisite information, the application will be
rejected. If an application is rejected under this rule, the applicant will not receive a refund of
the application fee or any cost recovery fee incurred in connection with the application up to
the date of rejection.
The above example concerns an easily remediable failure to provide all of the required
information. There are instances in which information is not strictly speaking necessary to
complete the picture, but the failure to disclose certain information nonetheless raises the
question why the applicant chose not to make a full disclosure. SARS will not accept as an
explanation the reason that the applicant considered that SARS did not need to know or that
SARS ought to have known about the undisclosed information because of information
already under SARS’s control. The ATR process is one in which SARS is dependent on the
honesty of taxpayers and tax practitioners. SARS therefore requires a sanction through
which to compel applicants to adhere to the highest ethical standards of disclosure in their
dealings with the ATR Unit. The application process is in many ways similar to an ex parte
application to a court of law. Our courts have repeatedly stressed that an applicant in such
an application – because it is unopposed – is under an even stricter duty to make a full and
frank disclosure and SARS considers that the same standard applies to ATR applications. It
follows that if a non-disclosure is discovered that SARS considers significant, the applicant
may be requested to provide reasons why the application should not be rejected on that
account.
(s) An application regarding a matter that would be unduly time-consuming or

resource intensive – section 80(1)(e)
This rejection is intended to help ensure that the limited resources available to the ATR Unit
are optimally utilised. As a result, SARS may reject such an application. In particular, this
exclusion may be applied in situations in which the applicant fails to submit a timely
application, taking into account the number and complexity of the issues raised and the
complexity of the proposed transaction itself or the voluminous nature of the supporting
documentation.
Before an application is rejected under this provision, the applicant will be notified and given
an opportunity to present any special circumstances that support or justify accepting the
application.

The applicant will generally receive a refund of the application fee if an application is rejected
under this exclusion.
Example 20
An applicant, a resident company, intends to enter into a complex multi-national restructuring
transaction which has been under consideration for more than a year. The proposed
transaction would involve more than a dozen steps and would involve more than 25 separate
legal arrangements. The applicant requests a ruling in connection with 20 discrete issues,
including complex issues under section 9D of the Income Tax Act, the corporate rules, and
the Eighth Schedule to that Act. The applicant submits the binding ruling application 15 days
before the proposed transaction date. In this situation it would require an extraordinary last
minute reallocation of resources to address this application to the detriment of other
applicants who had submitted their applications timeously. In addition, given the number and
complexity of the issues raised and the complexity of the underlying proposed transaction
itself, it is unlikely that SARS would be able to address the issues raised in a proper manner
within the limited time the applicant has left. Under these circumstances, the exclusion would
be applied.
(t) An application requesting SARS to rule on the substance of a ‘transaction’ and

disregard its form – section 80(1)(f)
SARS may reject an application about a matter that requires SARS to rule on the substance
of a transaction and disregard its form.
(u) The applicant fails or declines to provide additional information that has been
requested by SARS in connection with the application – section 79(5)
SARS is entitled to request additional information from an applicant at any time and to reject
an application if the applicant fails or refuses to comply with such a request. If an application
is rejected under this provision the applicant will not receive a refund of the application fee or
any cost recovery fee incurred in connection with the application up to the date of rejection.
3.1.2 Additional considerations in respect of which the Commissioner may reject an

application – section 80(2).
SARS is authorised to publish a list of issues in respect of which applications may be
rejected. The currently operative exclusions are listed below. The list is intended to assist
applicants by identifying specific issues in respect of which applications may not be
accepted, for example, to identify particular issues that –
 are currently pending before the courts; or
 may be declined because these issues are inherently or distinctly factual in nature.

Income Tax
(a) The deductibility of expenditure relating to the taking over of liabilities or of
provisions upon the acquisition of a business.
(b) The qualifying allowance, contemplated in section 24C of the Income Tax Act, in
respect of future expenditure, that SARS may determine.
(c) The validity of the treatment of amounts as ‘salary sacrifices’ for remuneration
purposes.
(d) Requests that circumvent mechanisms enabling SARS to issue directives. For
example, this exclusion will apply to directives as provided for in paragraph 3 of
the Seventh Schedule to the Income Tax Act.
(e) The interpretation and application of the exemption under section 10(1)(c)(v) of
the Income Tax Act in relation to any agreement entered into before
1 January1990.
(f) The deductibility of any expense incurred by an employer in order to transfer or
extinguish, in whole or in part, its post-retirement medical aid obligations to past
and present employees (excluding deductions under section 12M of the Income
Tax Act), specifically including, but not limited to –
(i) lump sum contributions to pension, provident or benefit funds;
(ii) lump sum settlement payments made directly to employees; and
(iii) premiums paid by the employer to acquire annuity policies.
(g) The deductibility, under sections 11(a) or 24J(2) of the Income Tax Act, of
interest incurred by a company on debt used to finance the acquisition of
shares in another company for the purpose of acquiring the underlying assets
or business.
(h) The determination of the place of effective management for purposes of the
definition of the term ‘resident’ in section 1(1) of the Income Tax Act.
(i) The tax implications of transactions that involve a so-called purpose trust.
Value-Added Tax (VAT)
(a) Applications in which the supplier of goods or services is not the applicant or a
co-applicant and the application pertains to the VAT liability of a supply of
goods or services made by that supplier.
(b) Confirmation that a person is acting as an agent or principal in respect of a
supply of goods or services.
(c) The application of section 8(15) of the VAT Act, and whether a supply of goods
or services constitutes a single supply.
(d) Confirmation whether or not any technical requirements are met in respect of
electronic invoicing.
Donations Tax
(a) Considering the price or amount that would constitute ‘fair market value’ under
section 55(1) of the Income Tax Act.
(b) Any exercise of SARS’s discretion under section 58(1) of the Income Tax Act
concerning the adequacy of consideration given for the disposal of property.

General
(a) Applications concerning the attribution, allocation or apportionment of
expenditure or input tax (from an income tax and VAT perspective), excluding a
request for an alternative apportionment method in terms of section 41B of the
VAT Act.
(b) Applications pertaining to the tax consequences of transactions in respect of
agreements which have already been concluded, except requests for:
(i) VAT rulings or VAT class rulings under section 41B of the VAT Act; or
(ii) The reconfirmation of a ruling, before its expiry date, if the facts
(including all the terms of the transaction) and the applicable provisions
of the relevant legislation remained the same.
(c) Applications relating to or involving transactions which, in the opinion of SARS,
could be subject to any general or specific anti-avoidance provisions in the
various Acts administered by SARS. Should the applicant be uncertain whether
this item will apply to an application, a draft application may be submitted
before registering it on e-Filing and paying the application fee. This application
should clearly indicate ‘No Rulings List’ in the subject line and be sent to
ATRInfo@sars.gov.za.
Notes:
1. The list of additional considerations is published on the SARS website on the ATR
homepage and is updated on a continuous basis. Please consult the list before
submitting the ruling application to ensure that the issue is not part of the latest updated
list.
2. If you submit an application and it is subsequently determined that the application
requests or requires a ruling in connection with an issue that was identified in the
exclusions as published in the Government Gazette at the time that the application was
filed, the application may be rejected without any refund of the application fee.
4. The ruling process

4.1 The nature of the process
The ATR process is distinctly formal. There is a specific process to follow for an application
and specific rules are applicable with regard to the information that must be submitted with
the online application in order to obtain a ruling. The process and requirements are
discussed in more detail below.
4.2 The application process

The application process starts with the completion and submission of the online application
forms. These forms must be filed through the SARS eFiling system.
4.2.1 Filing
Early filing
In many cases a complex transaction may undergo a number of changes and modifications
before the terms of the proposed transactions are finalised. At that point, the transaction
often moves very quickly to completion and the application must be filed as soon as the
proposed transaction reaches the stage in which it is seriously contemplated. Doing so gives

your application a place in the ‘queue’ and permits the specialist to become familiar with the
general nature of the proposed transaction and the potential issues that may arise. Please
notify the specialist immediately of any changes or developments in connection with the
proposed transaction in progress. Any substantive changes or developments may lead to a
revised estimated cost recovery fee and timeframes.
Timeous filing
Applications should be filed in time. In particular, the application must be filed sufficiently in
advance to allow SARS adequate time to review it and issue the ruling before the proposed
transaction date. The number and complexity of the issues raised and the complexity of the
proposed transaction should also be considered when filing the ruling application.
Your application must be submitted at least 40 business days before –

 the date of the proposed transaction; or
 any other date or deadline you request or specify in your application,
whichever is earlier.
Reconfirmations and extension requests must be filed 60 business days before the validity
period of the binding ruling previously issued, expires.
Late filing
A late application may not be accepted –
 unless extraordinary circumstances can be motivated in connection with the
proposed transaction and sound reasons for the late application have been
submitted; or
 under any circumstances if it is filed less than 20 business days before the earlier of
those dates referred to under ‘Timeous filing’ above.
Late reconfirmation or extension requests may not be accepted unless extraordinary

circumstances can be motivated for the late submission. They cannot be accepted under
any circumstances if they are filed less than 20 business days before the validity period of
the original binding ruling expires.
Completed filing
An application is not considered ‘filed’ until the –
 estimated cost recovery fee has been accepted online;
 Letter of Engagement has been accepted and submitted; and
 advance payment has been made.
Processed
Applications are generally processed on a ‘first come, first served’ basis. Urgent applications
which are charged at a higher cost recovery rate, will only be accepted on an urgent basis if
capacity is available. SARS may accept or reject such a request.

4.2.2 Starting the application process
The application process starts with the completion and submission of the online application
forms through the SARS eFiling system. The system can be accessed on the Internet via the
SARS website www.sars.gov.za or through the SARS eFiling website
www.sarsefiling.co.za. The Advance Tax Rulings website also contains specific
instructions in connection with each form to assist in the completion process. The link to
Advance Tax Rulings can be accessed after logging in by selecting ‘Services’ and then
‘Other Services’.
Each SARS office has free internet kiosks available for use by taxpayers who require access
to the internet for eFiling purposes. Please contact the ATR Unit on 012 422 8589 for
guidance through the online application process or to answer any questions you may have.
Note:
All applications must be filed through the SARS eFiling system. The accompanying binding
ruling application documentation can also be uploaded on the system. There is a file size
limit of 10MB. If this is insufficient, please contact the ATR Unit for further guidance.
4.2.3 The pre-screening checklist

The first form to be completed is the pre-screening checklist. This checklist is a tool to help
you determine whether or not your application may be subject to rejection or a discretionary
rejection under section 80(2). If your answer to a question indicates that a rejection may
apply, an information box will appear that identifies the potential problem.
If your ruling application is subject to a rejection or a discretionary rejection, you will not be
able to proceed any further with the application process. In order to proceed to the next
screen or step in the application process, no rejection must apply.
Note: The pre-screening checklist must be completed correctly and accurately. Failure to do
so (for example, by answering ‘no’ to a question despite the applicability of the exclusion),
may result in your application being rejected during the initial review without any refund of
your application fee.
If you are unsure whether or not a discretionary rejection may apply to a specific ruling
application, you may forward a brief summary of the issue in question and the reason(s) for
your concern to ATRInfo@sars.gov.za. The ATR Unit will inform you whether or not your
application would be subject to rejection.
4.2.4 Standard terms and conditions

The pre-screening checklist also includes a statement of the standard terms and conditions
that apply to your application. These terms and conditions relate to matters such as billing
terms, your obligation to supply information in connection with your application, and SARS’s
right to reject your application if any of the exclusions should be found applicable. You are
required to accept these terms and conditions before proceeding to the next form (screen).
4.2.5 Contact details and other basic information

If the pre-screening checklist has been completed in full, select the option ‘Next’ to open the
following form. This form, and the other forms that follow, require you to submit certain basic
information about yourself and your application, including contact details and the capacity in
which you are filing your application (for example, in your individual capacity or in your
capacity as a representative or on behalf of a third party or class of persons).

You will also be requested to provide certain general information about the tax types (for
example, income tax or VAT) and the issue areas (for example, corporate rules or controlled
foreign company rules) raised in your application. This information assists to expedite the
processing of your application and to ensure that your application is assigned to the
appropriate specialist without delay.
4.2.6 Required statements and consent – sections 80(1)(b)(iii)(aa), 79(4)(n) and

79(4)(l)
Under section 80(1)(b)(iii)(aa), an applicant must submit a statement that to the best of its
knowledge, it (or any connected person in relation to it ) is not currently the subject of an
audit, investigation, objection and appeal, or other proceeding before the Commissioner or
the courts in connection with any issue that is the same as or substantially similar to any
issue raised in the application.
Under section 79(4)(n) and (o), an applicant must submit a statement that to the best of its
knowledge, its tax affairs (and in the case of a binding class ruling application, those of the
class members, (if they are less than 10 members)) are in order as at the date of submission
of the ruling application and that no registrations, returns or taxes due are outstanding.
In addition, under section 79(4)(l), the applicant must consent to the publication of the final
ruling in edited form by SARS in accordance with section 87.
Both the required statements and the consent must be included in your online submission of
your application documents. If it is not included, it will result in a delay in the ruling process
while awaiting the submission thereof.
4.2.7 Payment of the application fee

The application fee is payable when the ruling application is submitted online. After the
online submission, the status of the ruling will reflect as ‘Submitted – Unpaid’. Further
guiding steps are provided during this status period to assist in the online payment of the
application.
If the online payment is not made within 10 business days from the submission date, the
application will expire automatically. If you wish to continue with the application, you will
have to re-apply online.
4.2.8 Confirmation and assignment to a specialist

Once you have successfully submitted your application forms and paid the application fee,
you will receive an electronic confirmation. If the application has been submitted with
supporting information and other required submissions, it will now be evaluated for
acceptance thereof. If it is accepted, the application will be allocated to a specialist.
The specialist will be primarily responsible for reviewing and processing your application and
issuing of the binding ruling. A ruling application may still be rejected during the review
process if it becomes apparent that an exclusion is applicable.
4.2.9 Supporting information and other required submissions – section 79

Detailed supporting information and other required submissions in connection with your
application must be provided. This information is normally uploaded online after the
application has been submitted and the advanced payment been made. If the supporting
information has not been submitted simultaneously, it must be submitted within five business
days thereafter unless an extension is granted in writing.

For additional information regarding the scope and timing of these requirements, as well as
how the information should be submitted, please read 4.3 and Annexure E – Example of a
binding ruling application.
4.2.10 Acceptance or rejection of your application

Once your supporting information and other required submissions have been received, it will
be evaluated for acceptance to ensure that none of the conditions for rejection applies.
You will receive an electronic notification (Notice of Acceptance) of acceptance within five
business days after the submission date of the supporting information and other required
submissions.
The estimated cost recovery fee to issue the binding ruling will be published online within
five days after acceptance of the ruling application.
4.2.11 Technical assistance

If you experience any technical difficulties when filing your application or paying the
application fee you can contact the ATR Unit on 012 422 8589 or email
ATRInfo@sars.gov.za.
4.3 Supporting information and other required submissions – sections 79(4)

and (5)
Under section 79(4), you must submit certain substantive information together with your
online application. You are also required to propose a draft version of the ruling to be issued
and a description of the confidential information you believe should be deleted from the final
ruling before it is published by SARS.
These documents must be submitted together with your online application or alternatively
within five business days from the date of the confirmation. It is only upon receipt of all the
documents that the application can be processed.
Under section 79(5), SARS may request additional information during the ruling process.
4.3.1 Supporting information

Scope
Under section 79(4), you must submit the following information in connection with your
proposed transaction and ruling request:
1. A complete description of –
a. the proposed transaction in respect of which the ruling is sought, including its
financial and tax implications;
b. the impact the proposed transaction may have upon your tax liability or the
tax liability of any connected person in relation to you or to any class member,
both in principle and practice (by supplying the proposed tax computation);
c. any other transaction that you entered into before you filed the application or
that you may enter into after filing your application, if that other transaction –
o may have a bearing on the tax consequences of the proposed
transaction; or
o may be considered to be part of a series of transactions involving the
proposed transaction;

2. A statement of –
a. the specific ruling being requested;
b. the relevant statutory provision(s) or legal issue(s);
c. the reasons why you believe the specific ruling should be granted with
reference to the applicable law, but also with reference to the tax benefit you
or a connected person will gain or forfeit, depending on whether or not the
ruling is granted;
d. your interpretation of the relevant statutory provisions or issues, as well as an
analysis of any relevant authorities that you considered or are aware of,
whether or not they support the specific ruling you are seeking;
e. a statement to the best of your knowledge, as to whether the ruling is referred
to in section 80 and the list of additional exclusion considerations as
published in the Government Gazette;
3. A draft version of the BPR or BCR to be issued; and
4. A description of the information that you believe should be deleted from the final
ruling before it is published in order to protect the confidentiality of your taxpayer
information.
The above information is intended to ensure that SARS has a full picture of the proposed
transaction and the potential tax consequences for each of the parties involved. For
example, pursuant to 1.a. above, the description of your proposed transaction must, at a
minimum, disclose all of the essential and material terms, all of the parties to it, set forth
each step in it, as well as the timing and sequence in which those steps will be carried out,
and explain the non-tax purpose for both the overall transaction and each step in it. If your
proposed transaction involves multiple steps, you must also include a diagram illustrating
those steps.
Similarly, the tax and financial information required under 1.b. above must generally include
a quantification of the anticipated tax impact of the proposed transaction upon you, as well
as a detailed cash flow analysis. You must also provide an estimate of the amounts at issue.
For example, if you are requesting a specific ruling in connection with the treatment of a
proposed dividend for purposes of dividends tax, you must state the amount of that
proposed dividend and if this is not possible, you must state why it is impossible and provide
an estimate. Similarly, if you are requesting a ruling in connection with the capital gains tax
treatment of a proposed disposal of an asset, you must state the amount of the anticipated
capital gain.
Finally, pursuant to 1.c. above, you must provide a description of any other transaction that
you have already entered into or may enter into in the future which may have a bearing upon
the tax consequences of your proposed transaction. At a minimum, this requirement would
apply to any prior transaction that would, or would be likely to render your proposed
transaction ineligible for the specific ruling you have requested. Taxpayers are well-advised
to err on the side of supplying too much, rather than too little information in this regard. In
addition, under 1.c. above, you must consider any impact that a prior or subsequent
transaction might have in connection with the application of any anti-avoidance rule.

Examples
The following examples are intended to help illustrate the application of these requirements:
Example 21
Company A is a member of a group of companies. Its proposed transaction involves the
transfer of assets to Company B, another group company. Company A requests a ruling that
the transaction will qualify for ‘roll-over relief’ under section 45 of the Income Tax Act and
that no gain or loss will accrue to either company as a result of the transaction. The group of
companies, however, is also considering a possible subsequent disposal of more than 30%
of the shares of Company B to an unrelated third party. This subsequent transaction would
result in Company B ceasing to be a member of the same group of companies as
contemplated by section 45(4). Company B would be deemed to have disposed of the
assets received for their fair market value at the time of acquisition in a taxable transaction
and to have immediately reacquired them for the lower of their market value or base cost on
the date of that deemed disposal. In this instance, the possible subsequent transaction
would affect the application of section 45 of the Income Tax Act to Company B and must
therefore be disclosed pursuant to 1.c. above.
Example 22
Company A owns 100% of the equity shares of Foreign Company, a controlled foreign
company under section 9D(1) of the Income Tax Act. Company A is proposing to dispose of
its shares in Foreign Company to Company X. At the time of this proposed transaction,
Company X is neither a resident nor a connected person in relation to Company A.
Company A requests a ruling that the transaction qualifies for the participation exemption
under paragraph 64B(2) of the Eighth Schedule to the Income Tax Act. Company A,
however, is also intending to distribute the proceeds from this disposal in the following year
of assessment by means of a distribution that would not be subject to Dividends Tax.
Pursuant to the specific anti-avoidance rule in paragraph 64B(3) of the Eighth Schedule, that
subsequent distribution would render the disposal ineligible for the participation exemption
and would make any capital gain determined in respect of that disposal subject to the
provisions of paragraph 8(b) of the Eighth Schedule. In the circumstances, the subsequent
disposal must be disclosed pursuant to 4. above.
These examples are given for informational purposes only and are intended solely to
illustrate the scope of these requirements. You must ensure that these requirements are
satisfied. If you have any questions regarding the scope or application of these
requirements, you should consult the specialist assigned to your application.
Note: Under section 84(1), the misrepresentation or nondisclosure of any material fact in
connection with your proposed transaction renders your ruling void ab initio (from the time it
was issued). For additional information in connection with this issue, please read 5.2.1.
Your statement of the issue(s) raised should be as concise and specific as possible and
should be limited to the immediate question that you would like to have resolved in respect
of your proposed transaction. If your statement of the issue(s) raised is vague or overly
broad, the specialist will have to revise it and this may result in a delay in the issuance of
your ruling.

Deadlines for submission
Generally, this supporting information must be submitted within five business days of the
date of request. If you do not submit this information within the necessary time period, your
application may be rejected without any refund of the application fee. An extension of the
time period may be granted if SARS is satisfied that reasonable grounds exist for the delay.
Work on the application will not begin until the supporting information is received.
Reconfirmations
If you are applying to have the original binding ruling letter issued to you reconfirmed, the
original ruling letter must be attached together with a statement confirming that the facts
contained in the original ruling letter have not changed. A finding by SARS that there has
indeed been a change of circumstances may lead to the application for a reconfirmation
being rejected.
4.3.2 Draft ruling – section 79(4)(f),

You must also submit a draft version of the ruling to be issued. If, on request, you do not
submit this draft ruling, your application may be rejected without any refund of the application
fee. Work in connection with an application generally will not begin until this draft ruling is
received.
An example of a draft ruling may be found in Annexure E.
4.3.3 Information to be deleted before publication – section 79(4)(k)

You must also submit a description of the confidential information you believe should be
deleted from the final ruling before it is published by SARS.
If you do not submit this description, your application may be rejected without any refund of
the application fee. Work on the application generally will not begin until this information is
received.
Note that the identity of the taxpayer must be protected by SARS. It may in certain instances
be necessary to include information in a published ruling to facilitate communication with the
‘class’ for whose benefit a ruling has been made. In such instances the applicant must
consent in writing to the inclusion of that necessary information.
An applicant may not request that details of the proposed transaction be withheld to protect
its identity, or that of the class or any other person mentioned in the application, because
section 87(6) provides that the application or interpretation of a tax Act to a transaction is not
considered information that might reveal those identities. SARS is legally obliged to publish
its rulings subject to taxpayer confidentiality. Taxpayers who are engaged in transactions so
unique that their disclosure might compromise those taxpayers are therefore cautioned to
consider this aspect carefully before making an application for an ATR.
Reconfirmations and extensions will not be published.

4.3.4 Conditions and assumptions – section 78(3)
SARS may make your binding ruling subject to various conditions and assumptions.
These conditions and assumptions must be stated in your ruling. There are two types of
conditions and assumptions, namely standard and specific.
The standard conditions and assumptions are included in every binding ruling issued. They
address certain basic matters in connection with your ruling, such as the fact that it is based
solely upon the information submitted in connection with your application and the tax laws as
amended and in effect when the ruling is issued. A copy of these standard conditions and
assumptions may be found in Annexure A.
Specific conditions and assumptions may be required in connection with your ruling
depending on the nature of your proposed transaction and the specific ruling requested.
4.3.5 Organising your submission

Your submission must be accompanied by a ‘Documentation Checklist’. This checklist
details the different items of supporting information and other required submissions and
requires you to indicate either that you are submitting the item in question or that the item is
not applicable. For example, the issues raised may relate to a single proposed contract.
Under the circumstances, the requirement relating to prior or subsequent transactions that
may have a bearing upon the tax consequences of that proposed transaction would not be
applicable; only your assurance that it is not applicable, matters in that case.
The ‘Documentation Checklist’ is available on the SARS website. You can also find a copy of
the checklist in Annexure B.
Your submission should be submitted in the order set out in the ‘Documentation Checklist’.
In addition, each item should be clearly identified with an appropriate heading and/or file
name. Filenames must then be numbered sequencially to enable the specialist to open
those files in the right order.
These requirements are necessary in order to ensure that your application can be reviewed
and processed promptly. If different applicants organised their submissions differently or
failed to clearly identify the items being submitted, a substantial amount of time would have
to be devoted simply to finding relevant information.
The ‘Documentation Checklist’, together with the supporting information and other required
submissions, must be submitted to the ATR Unit before a ruling application can be evaluated
for acceptance thereof.
4.3.6 Additional information requested by SARS – section 80(3)

SARS may request additional information in connection with an application at any time. For
example, the specialist may request copies of the applicant’s most recent financial
statements or copies of agreements or draft agreements in connection with the proposed
transaction.
The time period for the submission of the additional information requested will be
communicated by the specialist assigned to the application and will typically depend upon
the volume and accessibility of the information sought. The additional information requested
should be uploaded online. It must form part of the record submitted in support of the
application. An e-mail to the specialist containing the required information may be helpful,

but it is insufficient, because the specialist is not permitted to submit documents online on
your behalf.
If the additional information requested is not provided within the negotiated time period, your
application may be rejected without refund of the application fee and you will be held liable
for any cost recovery fee incurred up to the date of rejection.
4.3.7 Confidentiality
Any information that you submit is subject to the secrecy provisions of the tax laws
and will be kept strictly confidential.
If you are filing an application with one or more co-applicants and you would like to avoid
disclosure of certain information to one or more of those co-applicants (for example, trade
secrets or ‘know how’), you must –
 notify the specialist assigned to your application of your request before submitting
that information;
 clearly identify the information in question; and
 clearly specify the co-applicants to whom this restriction would apply.
If these requirements are present in your application, the information in question will not be
disclosed to the specific co-applicants.
These procedures must also be followed by any co-applicant to an application who would
like to avoid disclosure of certain information to the applicant or to one or more of the other
co-applicants.
4.4 Cost recovery fee – section 81(1)

Applications for a binding ruling are subject to a cost recovery fee. If your application is
accepted, you will be given an estimate of the anticipated cost recovery fee that will be
charged in connection with your application. This estimated cost recovery fee will be
communicated to you via an automated e-mail within 5 business days from the date that you
receive notification of acceptance of your ruling application.
The cost recovery fee is based on the number of hours that it takes to consider the issues
raised in your application, as well as any direct costs incurred in connection with the issuing
of the ruling. These direct costs could include travel costs, for example, where a visit to your
operations might be helpful. They could also include the costs incurred in obtaining the
services of a consultant or expert, for example, an engineer or a scientist, when necessary
to advise upon technical aspects of a proposed transaction.
The cost recovery fee will vary depending upon factors such as the number and complexity
of the issues raised in your application, the complexity of the proposed transaction itself, and
the volume of agreements, documents and other information that must be reviewed.
Reconfirmation applications are subject to an application fee as well as a cost recovery fee
based on the complexity levels of the specific reconfirmation required.

4.4.1 Acceptance of the estimated cost recovery fee
The estimated cost recovery fee and time period to issue the binding ruling will be published
online through the eFiling system and you will receive an automated e-mail notifying you as
such. Should you wish to accept the estimation of the cost recovery fee, please do so online.
The estimation is only valid for 15 days. You may request an extension of this period by
contacting the specialist. The extension is granted at SARS’s discretion.
If the estimation is accepted, the Letter of Engagement must be read and the terms and
conditions accepted online. A signed copy of the Letter of Engagement must be uploaded
online or e-mailed directly to ATRInfo@sars.gov.za.
Work on the binding ruling application does not commence until the –
 estimated cost recovery fee and time period are accepted online;
 Letter of Engagement has been accepted; and
 advance payment has been made. (Please read 4.4.2.)
Your application may be rejected without refunding the application fee paid if these
requirements are not met.
4.4.2 Advance payment requirement

You are also required to pay 20% of the highest range of the estimated cost recovery fee in
advance. The advance payment can be made online together with the acceptance of the
estimated cost recovery fee and the acceptance of the Letter of Engagement.
Work on the application will not commence before the advance payment has been received.
Your application may be rejected without refunding the application fee paid if these
requirements are not met.
4.4.3 Revised estimated cost recovery fee – section 81(2)

SARS must notify you if it subsequently appears that the revised cost recovery fee may
exceed the original estimated cost recovery fee. This may occur, for example, if you amend
your application following its acceptance to reflect changes to the proposed transaction that
has been made.
4.4.4 Discussing the original estimated cost recovery fee or revised estimated cost
recovery fee
If you are of the view that the original estimated cost recovery fee or the revised estimated
cost recovery fee may be too high, you may discuss the matter with the specialist assigned
to your application. If an agreement cannot be reached, SARS’s determination of the
estimated cost recovery fee is final.
If the estimate is not accepted within 15 days, the application may be rejected without
refunding the application fee paid.

4.4.5 Payment terms
You will be billed for work performed and expenses incurred on your ruling application. The
invoice will be made available online and is payable within 30 days. Interest will incur on
amounts that remain unpaid after 30 days.
If the amount still remains unpaid after 60 days, it may be referred to a debt collection
agency. You will be held liable for any costs incurred in the collection process.
These payment terms are described in both the standard terms and conditions that are
included in the online application forms as well as in the Letter of Engagement.
An application will only be accepted on these terms.
All payments can be made online.
Note: The final ruling is available online only once the final invoice has been settled.
4.4.6 Payments in arrears – subsequent applications

No new applications will be accepted from the applicant or the applicant’s representative
until such time as all due payments have been made. In addition, future applications of such
applicant or the applicant’s representative may be subject to the advance payment of the full
estimated cost recovery fee due before work will commence on subsequent applications.
4.4.7 Refunds
SARS may grant a refund of the application fee or cost recovery fee paid in very limited
circumstances. They include the following:
 Your application has been accepted, but one or more of the issues becomes subject
to a rejection before the ruling is issued (for example, the issue raised becomes
subject to a matter pending before the courts).
 If the original estimated cost recovery fee published by the ATR Unit substantially
understated the cost recovery fee that would be incurred in connection with your
application and the revised estimate cost recovery fee is not acceptable to you. In
such a case, a refund of the application fee can only be entertained if the revised
estimate cost recovery fee would increase the original estimate cost recovery fee by
50% or more.
Refund requests cannot be accepted based exclusively upon the fact that you received a
negative ruling.
If the cost recovery fees you have paid exceed the actual costs that were incurred in
connection with your ruling, the excess will be refunded to you following the issuance of the
final ruling.
Interest is not payable on any refund. There are no exceptions to this rule.

4.4.8 Estimated time to issue a ruling
You will also be given an estimate of the time required to issue the ruling. This will be
communicated online on the Estimation screen and once the estimation is accepted, on the
Application Summary screen.
Applications exclude a number of business days in December and January. The business
days from 16 December to 15 January, both days inclusive, will be excluded for purposes of
an ATR application. This freeze period is applicable to all applications that are in progress
during that period
4.4.9 Estimated time to issue a reconfirmation and an extension

Reconfirmations and extensions will be subject to the same timelines as new applications.
The normal time period published online would therefore apply.
4.5 Letter of Engagement

The Letter of Engagement must be accepted online before work can commence on your
application. The letter contains the basic rights, obligations, terms and conditions in
connection with your application and the ruling process. It constitutes a binding contract
between yourself and SARS.
4.5.1 Summary of standard terms and conditions – Annexure A

The standard terms and conditions contained in the Letter of Engagement include matters
relating to billing and payment terms for the cost recovery fee, the obligation of interest on
late payments, SARS’s right to reject subsequent applications if outstanding fees on current
applications are not settled and the right to request the advance payment of the full
estimated cost recovery fee on such subsequent applications.
4.5.2 Additional terms and conditions

Depending upon the specific subject matter of your application, SARS may include additional
terms and conditions in the Letter of Engagement. For example, if it appears that your
application will require consultations with an outside expert, the Letter of Engagement would
include your consent to the use of that expert and the disclosure of information to that expert
to the necessary extent.
4.6 Substantive review

The specialist will commence the substantive review of your application as soon as the
supporting information and other required submissions, the advance payment and the
signed Letter of Engagement have been received. The estimated time frame to issue the
ruling is calculated from the date that all three requirements have been met.
The substantive review generally involves evaluating the information that you have
submitted in connection with your proposed transaction and considering the relevant
authorities regarding the issues raised. In some cases, the work may involve a site visit or
consultation with an expert such as a scientist or an engineer.
The specialist may request a meeting with you to clarify any aspects of the proposed
transaction or issues raised that may be unclear. You may also request a meeting with the
specialist during the substantive review process if you believe that it would help to expedite
the process.

4.6.1 Checking on the status of your application
You may check the status of your application at any time online using the system-generated
ATR reference number allocated to you.
4.6.2 Notification in the event of a proposed negative ruling – section 79(7)

SARS must notify you if it appears that the ruling to be issued differs materially from the
proposed ruling you requested (negative ruling). You can consult with the specialist in
connection with the matter.
If, following the consultation, SARS still intends to issue a negative ruling, you will be notified
again and provided with the opportunity to either change your application or to request that
SARS cease work on the application and that no ruling be issued (notice to discontinue).
This notice must be filed within 10 business days as from the date of SARS’s notice, by
withdrawing the application online and forwarding the motivating request through to the
specialist.
You will remain liable for all work done on the application up to the date that the application
is withdrawn on the system and the motivating request has been received by the specialist.
The normal terms and conditions as discussed will apply to all such requests as well.
Note: If a negative ruling is attributable to a problem or defect with a particular aspect of or

step within a proposed transaction and you intend to revise the proposed transaction to
address that problem or defect, you may request consent to amend your application to
reflect the terms of the revised proposed transaction. If SARS consents, you must submit
your amended application within the time period negotiated with SARS. If you fail to submit
the amended application within this time period, SARS can proceed to issue the negative
ruling unless you file a notice to discontinue before the specified time period expires. If you
subsequently decide to request a ruling in connection with the revised proposed transaction,
you must do so in the form of a new application, subject to the procedures and application
fee described above.
4.7 Issuance of the ruling and its publication in edited form

4.7.1 Draft copy for review and comment
If SARS intends to issue a positive ruling, a draft ruling will be issued online for your review
and comment. This draft ruling must be carefully reviewed and SARS must be provided with
feedback on any possible errors or omissions. Failure to correct a material error or omission
may render your ruling void ab initio or may result in its subsequent withdrawal or
modification. See 5.2 for additional information in connection with these issues.
If corrections are made on the original draft ruling, a new draft ruling will be issued online
again for your review and comment.
SARS will not issue the sanitised version of your ruling (edited ruling to be published) or the
final ruling unless you confirm in writing or online that you have reviewed the draft ruling and
that there are no material errors or omissions in it.

4.7.2 Publication and treatment of confidential information (sanitised or edited
ruling) – sections 87(1), (3) and (4)
Once the draft ruling has been approved by the applicant, the sanitised (edited) version will
be uploaded online. The final ruling will not be issued until the sanitised version has been
approved by you online.
Under section 87(1), SARS must publish binding rulings issued for informational purposes to
the general public. The publication thereof is required in order to ensure a level playing field
for all taxpayers and to prevent the development of a ‘private body of law’ by the taxpayers
and practitioners who have requested rulings.
However, the ruling must be published in a form that does not reveal the identity of the
applicant or other parties to the proposed transaction (confidential information). Confidential
information includes –
 the name, address, and other identifying details of the applicant, as well as any
person identified or mentioned in the ruling; and
 any information the disclosure of which would constitute a clearly unwarranted
invasion of personal privacy.
Under section 87(3), SARS is also required to provide you with a draft of the sanitised
(edited) version for your review and comment. SARS must also consider any additional edits
or deletions you may propose. However, under section 87(4) of the TA Act, SARS’s
determination regarding the contents of the sanitised ruling is final.
In certain limited circumstances, due to unique facts relating to the parties to the proposed
transaction or to the proposed transaction itself, it may not be possible to publish the ruling in
a form that would not reveal confidential information. In such a situation, SARS may publish
a summary of the issues raised in the application and the ruling that were given.
If a ruling has already been published on a similar transaction SARS may consent to the
non-publication of the applicant’s sanitised ruling version on grounds of duplication. In this
case, a ruling to this effect will be uploaded online and you will be requested to accept the
decision or provide feedback or to withdraw the ruling application. If you withdraw the
application you will be held liable for costs incurred up to date of withdrawal.
Note: Under section 87(6) the application or interpretation of a tax Act to a proposed
transaction does not constitute confidential information and may not be treated as such.
4.7.3 Issuance of the ruling

Once you have accepted the draft ruling and consented to the publication of the sanitised
version of the ruling, SARS will upload the ruling online. You can request that the hard copy
of the ruling be posted to the address provided in your application. This request must be
received no later than the date upon which you approved the ruling.

5. Effect of an ATR
5.1 General
One of the purposes of the ATR system is to provide greater certainty to taxpayers in
connection with the application and interpretation of the tax laws. The TA Act provides that a
BPR and BCR may, as the names imply, have a ‘binding effect’ upon SARS, subject to
certain very important requirements and limitations.
The most important limitation is that an ATR only has binding effect upon SARS in respect of
the applicant or co-applicant for the ruling in question. In addition, an ATR has this ‘binding
effect’ upon SARS only to the extent that the ruling is actually ‘applicable’ to that applicant or
co-applicant or class of persons. These terms are specifically defined by statute and are
discussed in more detail below.
A BCR has binding effect upon SARS in respect of the affected class members identified in
the ruling. In addition, a BCR has this ‘binding effect’ upon SARS only to the extent that the
ruling is actually ‘applicable’ to that affected class of persons.
A third party may not rely upon a binding ruling under any circumstances. In addition, a third
party may not cite a BPR or BCR in any proceeding, including court proceedings.
Note: There are certain circumstances in which an ATR may be rendered void or lose its
binding effect, even with respect to the applicant or co-applicants to which it applies. These
situations are discussed in more detail in 5.2 and 5.3.
5.1.1 Binding effect – section 82(1)

An ATR may have a ‘binding effect’ upon SARS, subject to certain very important
requirements and limitations. In particular, if an ATR ‘applies’ to you, SARS must interpret
and apply the tax laws in question in accordance with the ruling that was given in connection
with your application. The term ‘applies’ has a very precise meaning and is discussed in
5.1.2.
By definition a BPR or BCR must be in writing. Thus, an oral statement can never have
binding effect under section 82. In addition, a written statement can only qualify as a BPR or
BCR if it contains a statement identifying it as such in accordance with section 78(5)(a).
Thus, any correspondence from SARS without containing a section 78(5) statement can
never have a binding effect under section 82.
5.1.2 The applicability of a binding ruling – section 83

A binding ruling only applies to a person or class of persons if –
(i) the person or class member must be an applicant or an affected class member
identified in a binding ruling;
(ii) the provision or provisions of the tax Act at issue are the subject of the binding ruling;
(iii) the set of facts and circumstances or the transaction presented by the applicant are
the same as the particular set of facts and circumstances or the particular transaction
specified in the binding ruling;
(iv) the applicants’ set of facts and circumstances or transaction falls entirely within the
effective period for the effective period of the binding ruling; and
(v) any assumptions made or conditions imposed by SARS in connection with the
validity of the binding ruling have been satisfied or carried out.

The binding ruling will not apply to you and will not have any binding effect upon SARS with
respect to you, if you fail to satisfy any one of these requirements. This will apply if you are
an applicant or an affected class member in connection with that ruling.
5.1.3 No third party reliance – section 82(2)

A binding ruling does not have any binding effect upon SARS unless that binding ruling
applies to a person (the applicant) or class member (affected class member) in accordance
with section 83. In addition, under section 82(4), a BPR and a BCR may not be cited in any
proceeding before SARS or the courts other than a proceeding involving the applicant or
affected class member for that ruling. Thus, you cannot rely upon a binding ruling that has
been issued to someone else, even if the facts of your proposed transaction are similar to
those described in the published ruling.
There are two very important reasons for this limitation. First, many binding ruling
applications involve time sensitive transactions. As a result, it is critical that these rulings be
issued timeously. Unfortunately, these time pressures inevitably increase the risk of error. If
every ruling was to have general force and effect, the potential damage caused by an
erroneous ruling would increase exponentially and would necessitate a more lengthy review
and quality control process. By restricting the binding effect and precedent value of binding
rulings, Parliament has struck a balance between the need to protect the fiscus and the need
to provide timely guidance to applicants.
Secondly, binding rulings by their very nature are extremely fact-specific. While a published
ruling provides a summary of the proposed transaction at issue, it generally does not and
cannot include all of the relevant facts in every case. Something that you may view as a
‘minor’ difference in your proposed transaction may in fact be a critical difference.
5.2 Circumstances in which a binding ruling may be rendered void or lose

its binding effect
The most valuable aspect of a binding ruling is its binding effect. Because of this binding
effect, your binding ruling generally provides both guidance and certainty in respect of how
SARS will interpret and apply the tax laws to your proposed transaction.
This binding effect is subject to several important requirements, conditions and limitations.
Accordingly, there are a number of situations in which your binding ruling may be rendered
void or lose its binding effect. In some instances, this may happen due to some action (or
inaction) on your part. In other instances, it may be due to a change in law or, in some
cases, to the subsequent withdrawal or modification of your binding ruling by SARS.
5.2.1 Circumstances rendering a BPR or BCR void – section 84(1)

A BPR or BCR may be rendered void ab initio (from the outset) if –
 the facts stated in your application regarding the proposed transaction are materially
different from those of the transaction actually carried out;
 there is fraud, misrepresentation or non-disclosure of a material fact; or
 any condition or assumption stipulated by SARS is not satisfied or carried out.
A fact is considered ‘material’ if it would have resulted in a different ruling had SARS been
aware of it when the original ruling was made. If your BPR or BCR is rendered void ab initio,
it is treated as if it had never been issued at all. Thus, there would be absolutely no binding
effect upon SARS whatsoever.

5.2.2 Subsequent changes in the tax laws – section 85
Your ATR may cease to be effective if there is a subsequent change in the tax laws.
In general, such changes include the repeal or amendment of the tax laws in question or a
subsequent court decision that rejects or modifies the interpretation of the principles upon
which your ruling was based. In these cases, the effect is automatic and immediate – no
notice from SARS is required.
(a) Amendment or repeal of the relevant tax laws – section 85(1)(a)

Your ATR will cease to be effective if the provisions of the tax laws that were the subject of
your ruling are repealed or amended. The impact is prospective only and applies from the
effective date of the new legislation.
In the case of an amendment, this rule only applies to the extent that the amendment makes
a material change to the specific provisions at the time of issuing your ruling. In this context,
a material change would be one that would have resulted in a different ruling if the new
provision had been in effect when SARS made the original ruling.
The following examples are intended solely to illustrate the application of this rule:
Example 23
In 2012 SARS issues a ruling that a company will qualify for an allowance under
section 12B(h)(ii) of the Income Tax Act for solar energy units used by the taxpayer in the
generation of electricity from sunlight. In 2013, the reference to sunlight in section 12B(h)(ii)
is changed to solar energy. The change is not material and the ruling will not cease to be
effective.
Example 24
Section 2 of the Securities Transfer Tax Act, 2007 is amended in 2013 to levy securities
transfer tax on any reallocation of securities from a member’s bank restricted stock account
or a member’s unrestricted and security restricted stock account to a member’s general
restricted stock account. This is a material change and any rulings issued in respect of
securities transfer tax may be affected by this change.
These examples are given for informational purposes only and are intended solely to
illustrate the types of situations in which this rule may apply. Due to the nature of this rule,
any determination must be made exclusively on a case-by-case basis after a careful review
of the facts and circumstances.
If you are unsure of the impact of a subsequent court decision upon your binding ruling, you
may request a status ruling from SARS. Status rulings are discussed in 5.2.3.

(b) Subsequent judicial decisions – section 85(2)
Your ATR will cease to be effective if a court subsequently overturns or modifies an
interpretation of the tax laws upon which your ATR was based. If this rule applies, your
binding ruling will generally cease to be effective from the date of the decision in question,
unless –
 the decision is on appeal;
 the decision is fact-specific and the general interpretation upon which your binding
ruling was based was unaffected; or
 the reference to the interpretation upon which your binding ruling was based was
obiter. The term ‘obiter dicta’ generally refers to opinions which judges express in the
course of their judgments, but which are not essential to the decision of the matters
at issue.
In addition, the rule generally does not apply to a decision, unless that decision is published
and has a precedent effect.
Note: The exceptions to this rule only apply to its ‘automatic’ aspect. Depending upon the
facts and circumstances, a subsequent judicial decision may prompt SARS to withdraw or
modify your binding ruling in accordance with the provisions of the TA Act. These provisions
are discussed in more detail in 5.3.
(c) No notice by the Commissioner – section 85(2)

Your binding ruling ceases to be effective immediately upon the occurrence of the
circumstances described in (a) or (b) above whether or not SARS publishes a notice of the
withdrawal or modification. It follows that –
 if the provision of the tax Act that was the subject of the binding ruling is repealed or
amended, the binding ruling will cease to be effective from the date that such repeal
or amendment is effective; or
 if a court overturns or modifies an interpretation of the tax Act on which the binding
ruling is based, it will cease to be effective from the date of judgement.
SARS is not required to give notice of the above events.
5.2.3 Status rulings

If you are not sure about the impact of a subsequent change in the tax laws upon your
binding ruling, you may request a status ruling from SARS. A status ruling gives SARS’s
view as to whether or not those changes affect your binding ruling (and if so, the extent to
which they do so).
The status ruling request must be sent to ATRInfo@sars.gov.za.

5.3 Withdrawal or modification by SARS – section 86
SARS may withdraw or modify your binding ruling. A withdrawal or modification is generally
prospective in effect. However, there are certain very limited circumstances in which it may
be retrospective.
5.3.1 Prior notice

SARS may withdraw or modify your binding ruling at any time. Before such possible
withdrawal or modification however, you will be given notice thereof and provided with a
reasonable opportunity to state any proposition of law or fact relevant against the proposed
withdrawal or modification.
5.3.2 Situations in which an ATR may be withdrawn or modified with retrospective

effect
There are certain very limited situations in which SARS may withdraw or modify your binding
ruling with retrospective effect. In particular, SARS may do so only if your binding ruling was
made in error and any of the following three circumstances apply:
 You have not yet commenced the proposed transaction, or have not yet incurred
significant cost in respect of the arrangement.
 There is any person other than you who will suffer a significant tax disadvantage if
your binding ruling is not withdrawn or amended retrospectively while you will suffer
comparatively less if it is withdrawn or amended.
 The effect of your binding ruling will materially erode the South African tax base and
it is in the public’s interest to withdraw or amend the binding ruling retrospectively.
As with any other withdrawal or amendment, SARS will give you notice thereof and provide a
reasonable opportunity to state any opposing proposition of law or fact relevant to that
decision. Due to the importance and urgency of these situations, you are requested to
respond within five business days from the date of such notice.
5.3.3 Manner and form of the withdrawal or modification

If your binding ruling is withdrawn or modified SARS will issue a notice of that withdrawal or
modification to you. This notice will specify the effective date of the withdrawal or
modification, which date will not be earlier than the date the decision is delivered to the
applicant, unless the circumstances mentioned in section 86(4) and indicated below apply:
1) The ruling was made in error.
2) a) The transaction has not yet commenced or significant costs have not yet been
incurred in respect of the arrangement.
b) A person other than the applicant or class member will suffer significant tax
disadvantage if the ruling is not withdrawn or modified retrospectively and the
applicant will suffer comparatively less if the ruling is withdrawn or modified
retrospectively.
c) The effect of the ruling will materially erode the South African tax base and it is in
the public interest to withdraw or modify the ruling retrospectively.

5.3.4 Published rulings – section 87(9)
SARS must publish a notice of withdrawal or modification in the manner and media as the
Commissioner may deem appropriate.
In the case of a BPR or a BCR the notice must also be published in such form as does not
reveal any confidential information.
6. Miscellaneous
6.1 Questions and additional information
If you have any questions in connection with the ATR system and its process flows or would
like additional information, you may contact the ATR Unit. Contact details may be found on
the SARS website www.sars.gov.za or you may e-mail ATRInfo@sars.gov.za or phone
012 422 8589.

7. Annexures
Annexure A – Standard conditions and assumptions
Basis of the ruling(s) given in this letter

This ruling letter and the ruling(s) set forth herein are based upon the following:
1. The information, documents, representations, facts considered and assumptions
presented being true and accurate;
2. Any legal agreements or contracts entered into (or proposed to be entered into) in
connection with the proposed transaction being legally valid and enforceable in
accordance with their stated terms, the parties to those agreements timeously
satisfying their obligations under those agreements, and those agreements
otherwise being carried out in accordance with their terms; and
3. The interpretation and application of tax laws, regulations, binding general rulings,
and case law in effect as of the date of this binding private ruling.
The ruling(s) set forth in this ruling letter only apply to the provisions of the tax laws identified
in this binding private ruling in connection with the proposed transaction described herein.
The understanding of the South African Revenue Service (SARS) of the proposed
transaction
This ruling letter and the ruling(s) set forth herein are based upon the understanding of
SARS of the proposed transaction as described herein.
Please note that if you believe that this understanding is incorrect, inaccurate or incomplete,
it is your obligation to notify SARS immediately. The failure to rectify a misunderstanding of a
material fact may result in the ruling being withdrawn or modified.
Subsequent changes in the tax laws
This binding private ruling letter will cease to be effective in any of the following
circumstances:
1. The provisions of the tax laws that are the subject of this binding private ruling are
repealed or amended; or
2. A court overturns or modifies an interpretation of the provisions of the tax laws on
which the rulings set forth herein are based unless–
 the decision is on appeal;
 the decision is fact-specific and the general interpretation upon which the
rulings were based is unaffected; or
 the references in the decision to the interpretation upon which the rulings were
based are obiter dicta.
In any of these circumstances, the ruling letter will cease to be effective immediately upon –
1. the effective date of the repeal or amendment of the provisions in question, or
2. the date of the reasons for judgment.
SARS is not obliged to notify the applicant, or any co-applicant(s) if applicable, or to
otherwise publish a notice of withdrawal or modification.

Fraud, misrepresentation or non-disclosure
1. This binding private ruling letter is void ab initio in any of the following circumstances:
 The proposed transaction is materially different from the transaction actually
carried out;
 There is fraud, misrepresentation or a non-disclosure of a material fact; or
 Any condition or assumption prescribed in this binding private ruling is not
satisfied or carried out.
2. A fact is considered material if it would have resulted in a different ruling had SARS
been aware of it when issuing this binding private ruling letter.
Other requirements and limitations

This ruling letter and the ruling(s) set forth herein are also subject to any other requirements
and limitations set forth in Chapter 7 of the TA Act, as well as any requirements and
limitations set forth in any general binding ruling issued under section 90 of the TA Act.
This ruling letter and the specific ruling(s) set forth in it only apply to the applicant and any
co-applicant(s) identified herein. This ruling letter may not be cited in any proceeding,
including court proceedings, other than a proceeding involving the applicant or any co-
applicant(s) identified herein.

Annexure B – Documentation Checklist
DOCUMENT CHECKLIST
ADVANCE TAX RULING APPLICATION
Applicant’s Name: _______________________________________________

Application reference no.: _________________________________________
Tax reference no. or Entity registration no.: __________________________
Agent’s Name (if any): ____________________________________________
Dependent on facts
Item Annexure Answer
and circumstances
Power of Attorney (if applicable) A Yes No
Complete description of the proposed
1 Yes No
transaction
Complete
1
description of the impact on
your tax liability or any connected
person in relation to you, and relevant 2 Yes No
information regarding the financial or tax
implications of the proposed transaction
Transactions before or after filing that
may have a bearing on the tax Applicable
3 No
consequences of the proposed Not Applicable
transaction
Transactions before or after filing the
Applicable
application that may be considered to be 4 No
Not Applicable
part of a series of transactions
A statement of the ruling being
5 Yes No
requested
A statement of the relevant statutory
6 Yes No
provisions or issues
A statement of why you believe the
7 Yes No
proposed ruling should be granted
Your interpretation of the relevant
statutory provisions or issues as well as
an analysis of any relevant authorities
8 Yes No
that you considered or are aware of,
whether or not they support the ruling
sought
Draft version of the ruling 9 Yes No
Description of confidential information to
10 Yes No
be deleted before publication
Confirmation of payment of application
11 Yes No
fee
Explanatory statement in respect of
12 No Yes
discretionary rejections that may apply
ADDITIONAL SUPPORTING DOCUMENTATION

(Contracts, Proposals etc)
(Optional unless requested by specialist)
Document Title or Description Reference
1
‘You’ and ‘your’ refer to the applicant(s) or co-applicants for the Binding Ruling.

Annexure C – ATR system process flow

Annexure D – Review process
Substantive Review Process
Research, Consultations and drafting of

memo and ruling
If policy issue, consultation with Legislation

Department
Internal Committee Approval
External Committee Approval if contentious

or escalation required
Inform Applicant regarding specific positive

or negative ruling

Annexure E – Example of a binding ruling application
The South African Revenue Service

281 Middle Street
Nieuw Muckleneuk
Brooklyn
Pretoria
Dear Sir
Applicant – ATR reference number - xxxx

Binding ruling application relating to tax treatment of the (for example) proceeds from the
disposal of shares
1. Introduction
1.1 Ruling request
On behalf of the applicant we hereby request a (for example) binding private ruling relating to
the tax treatment of (for example) certain proceeds to be received by the applicant from the
disposal of shares in a company to be formed (‘NewCo’).
NOTE: This paragraph should summarise the ruling request.
1.2 Sections of the Act referred to in the application
The relevant provisions of the Income Tax Act No. 58 of 1962 (‘the Act’) referred to in this
application are:
 The definition of the term ‘gross income’ in section 1(1)
 Paragraph 2(1) of the Eighth Schedule to the Act
1.3 Documents
Please find attached the following supporting documentation:

 Annexure A - Disclosure of required information. This annexure sets out the
information required to be submitted in accordance with section 79 of the Tax
Administration Act (TA Act).
 Annexure B - A letter in terms of section 87(1) of the TA Act whereby the applicants
consent to the publication of the ruling by SARS.
 Annexure C - The proposed draft ruling.
2. Factual background
2.1 Background
This section should provide a complete description of the proposed transaction in respect of
which the ruling is sought (section 79(4)(c) of the TA Act). This should include as much
information as possible about the applicant and the transaction to ensure SARS’s
understanding of the proposed transaction.

2.2 Detailed description of the transaction
This section should set out the transaction step-by-step.
3. Relevant provisions of the Act
Statement of the relevant statutory provisions or issues (section 79(4)(g) of the TA Act).
This section should set out a statement providing the interpretation of the relevant statute to
the proposed transaction.
Example
It is our opinion that the proceeds to be received by the applicant from the disposal of
the shares do not fall within the ‘gross income’ of the applicant and are therefore not
subject to income tax in the hands of the trust. Our reasons for this conclusion are set
out in detail below.
The relevant portion of the definition of the term gross income’ in section 1(1) of the
Act refers to ‘in the case of any resident, the total amount, in cash or otherwise,
received by or accrued to or in favour of such resident … during such year … of
assessment, excluding receipts or accruals of a capital nature …’
It follows that the amounts in question would be subject to the CGT provisions of the Act.
The applicable provision is paragraph 2(1) of the Eighth Schedule to the Act. The relevant
portions of that paragraph record that the Eighth Schedule ‘applies to the disposal after
valuation date of …any asset of a resident …’
4. Tax implications
This section should set out a comprehensive description of the impact the proposed
transaction may have upon the tax liability of the applicant or co-applicant, and where
relevant, any connected person in relation to the applicant, including any and all relevant
information regarding the financial or tax implication of the proposed transaction
(section 79(4)(d) of the TA Act).
NOTE: PLEASE ENSURE THAT ALL FINANCIAL INFORMATION APPLICABLE TO THE

PROPOSED TRANSACTION IS PROVIDED AND THE RESULTING TAX CONSEQUENCES
THEREOF.
5. Application of the law
5.1 General
This section should provide the applicant’s interpretation of the relevant statutory provisions
or issues (section 79(4)(i) of the TA Act). It should therefore briefly provide the rationale for
interpreting the specific section/s of the Act on which a ruling is being sought in the manner as
requested.
Example:
We believe that the proceeds from the disposal of the shares to investors do not fall
within the ‘gross income’ of the applicant’s trust. This is because we believe that
these proceeds will be of a capital nature in the hands of the applicant. It is in respect
of this conclusion that we seek a binding private ruling. We consider below the
relevant case law which provides support for conclusion.

5.2 Applicable case law
This section should provide an analysis of the relevant authorities either considered by the
applicant or of which the applicant is aware, whether those authorities support or are contrary
to the proposed ruling being sought (section 79(4)(i) of the TA Act). Therefore case law for
and against the specific ruling should be given.
6. Conclusion
Example
We request SARS’s confirmation that, for the reasons outlined above; the proceeds
from the disposal from the shares in NewCo would not constitute ‘gross income’ in
the hands of the applicant because they will be receipts of a capital nature. Therefore
the proceeds will be subject to paragraph 2(1) of the Eighth Schedule to the Act.
Should you require any additional information or have any questions regarding this application please
contact Mr X on (011) xxx-xxxx.
Yours faithfully
Mr X
Director
Tax Practitioner Reg No PR-xxxxxxx
Annexure A
Disclosure of required information
Detailed below is the information required to be submitted in accordance with section 79 of the TA Act
a. Applicants
- Applicant’s postal address and telephone number – section 79(4)(a)

Applicant name
PO Box xx
Johannesburg
2196
Telephone Number: (011) xxx-xxxx
- Applicant’s representative’s postal address and telephone number – section 79(4)(b)

Insert representative name
Insert company name
Private Bag X
Johannesburg
2052
Telephone: (011) xxx-xxxx
Fax Number: (011) xxx-xxxx
b. Reasons why the proposed ruling should be granted – section 79(4)(h)
Example
We submit that the proposed ruling should be granted so as to enable the applicant to
dispose of the shares in NewCo.

c. Statement in terms of section 79(4)(i)
Example
This ruling application has fully considered the relevant statutory provisions and case law and
it is considered that this ruling is consistent with such provisions and law.
d. Statement in terms of section 79(4)(j)
To the best of the applicants’ knowledge, and the applicants’ representative’s knowledge, the
same or substantially the same issue upon which this ruling has been sought is not the
subject of an audit examination, investigation, ruling application, objection, appeal, or other
proceedings currently before SARS or the courts involving the applicant or any connected
person in relation to the applicant.
e. Statement in terms of section 79(4)(n) and (o)

To the best of the applicants’ knowledge, and the applicants’ representative’s knowledge, the
applicants, including class members if applicable, are fully tax compliant for all applicable
taxes.
f. Description of the information the applicant believes should be deleted from the final
ruling before publication – section 79(4)(k)
All references to the applicant’s name should be deleted from the final ruling before
publication in order to protect the applicant’s confidentiality. We further suggest that the name
of the companies forming part of the proposed transaction should also be deleted.
Annexure B
Letter of Consent
a. Person(s) to whom this ruling applies
This ruling letter has been applied for by ABC Company, tax registration number 123. The co-
applicants for this ruling are PQR Company, tax registration number 456, and XYZ Company,
tax registration number 789.
b. Relevant tax laws
Sections 79(4)(i) and 87 of the TA Act.
c. Consent
The applicants represented by XYZ legal firm, herewith consent to the publication of the advance tax
ruling by SARS in accordance with 87 of the TA Act, provided that the publication is in such a form as
does not reveal the identity of the applicants or class members. Before the final publication, SARS will
provide a draft copy of the edited ruling for review and comment. It is understood that SARS’s
determination regarding the contents of the published ruling is final.

Annexure C
EXAMPLE OF A DRAFT RULING LETTER
1. Person(s) To Whom This Ruling Letter Applies
This ruling letter has been applied for by ABC Company, tax registration number 123. The co-
applicants for this ruling are PQR Company, tax registration number 456, and XYZ Company,
tax registration number 789.
2. Relevant Tax Laws
All legislative references are to the Income Tax Act No. 58 of 1962 (the Act).
The specific ruling has been requested in respect of section 45(4) of the Act.
3. Description of the Proposed Transaction
ABC Company, PQR Company and XYZ Company are all South African companies and are
currently members of the same group of companies. ABC Company is the holding company
for the group and currently owns 100% of the equity shares of both PQR Company and XYZ
Company. PQR Company and XYZ Company are engaged in complementary lines of trade.
In order to simplify the structure of the group and to improve efficiency, PQR Company is
proposing to transfer all of its assets and liabilities to XYZ Company. Upon the completion of
the transfer, PQR Company will liquidate into ABC Company. ABC Company and XYZ
Company will continue to be members of the same group of companies.
4. Specific Conditions and Assumptions
Section 78(3) of the TA Act provides that a binding private ruling may be made subject to the
conditions and assumptions prescribed in the ruling.
This ruling letter is made subject to the following conditions and assumptions:
• The transfer by PQR Company to XYZ Company constitutes an ‘intra-group
transaction’, as defined in section 45(1).
• ABC Company and XYZ Company will continue to be members of the same group of
companies following the proposed transaction.
• This ruling letter does not apply in respect of any tax consequences that may arise if
XYZ Company ceases to be a member of the same group of companies as ABC
Company.
• The proposed transaction is not part of or connected with any other transaction,
operation or scheme.
5. Ruling
The ruling made in connection with the proposed transaction is as follows:

• Pursuant to paragraph (c) of section 45(4), ABC Company and PQR Company will be
deemed to be one and the same company for purposes of paragraph (b) of
section 45(4).
6. Period for which this ruling letter is valid
This binding private ruling will be valid for a period of [number] [in words] years from the date
of the ruling.

Annexure F – Standard ruling timelines

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SOUTH AFRICAN REVENUE SERVICE

Another helpful guide brought to you by the

Comments or suggestions on this guide may be sent to ATRInfo@sars.gov.za.

Comprehensive Guide to Advance Tax Rulings i

Comprehensive Guide to Advance Tax Rulings ii

Comprehensive Guide to Advance Tax Rulings iii

Comprehensive Guide to Advance Tax Rulings iv

Abbreviations for the meaning of words, phrases or concepts are stated

Comprehensive Guide to Advance Tax Rulings 2

1.1 Purpose, benefits and other considerations

Comprehensive Guide to Advance Tax Rulings 1

1.2 A brief overview

Comprehensive Guide to Advance Tax Rulings 2

‘Filed’: An application is considered filed when the applicant has –

Comprehensive Guide to Advance Tax Rulings 3

An ‘SMME’ for purposes of the reduced fee is defined as –

1.2.2 The ATR process in a nutshell

These steps are summarised below:

Comprehensive Guide to Advance Tax Rulings 4

Comprehensive Guide to Advance Tax Rulings 5

Comprehensive Guide to Advance Tax Rulings 6

2.2 Application for an ATR

A representative, such as a lawyer or accountant, may file an application on behalf of a

2.2.1 Special rule for partnerships

Comprehensive Guide to Advance Tax Rulings 7

2.2.3 Rules for BCR and BPR applications

By way of another example: Company A proposes to pay bursaries to employees, they

Comprehensive Guide to Advance Tax Rulings 8

2.3 Fees – section 81

2.3.1 Application fee

Categories of Estimation Estimated Time

Standard R10 000 to R35 000 R7 000 R650 20 days

Involved R35 000 to R70 000 R14 000 R650 45 days

Complex R70 000 to R105 000 R21 000 R650 60 days

Extraordinary Case-by-case Case-by-case R650 Case-by-case

Urgent applications Case-by-case Case-by-case R1 000 Case-by-case

Comprehensive Guide to Advance Tax Rulings 9

2.3.2 Cost recovery fee

Rejections generally address four basic areas of concern:

These limitations are discussed in more detail in 3.1.1 below.

Comprehensive Guide to Advance Tax Rulings 10

Comprehensive Guide to Advance Tax Rulings 11

Comprehensive Guide to Advance Tax Rulings 12

(a) An application requesting the rendering of an opinion, conclusion or

Situations in which this exclusion or refusal may not apply

Comprehensive Guide to Advance Tax Rulings 13

Situations in which this exclusion or refusal might not apply

(c) An application requesting an opinion, conclusion or determination regarding

Comprehensive Guide to Advance Tax Rulings 14

Situations in which this exclusion or refusal might not apply

(d) An application requesting an opinion, conclusion or determination regarding

There are no exceptions to this rule.

(e) An application requesting an opinion, conclusion or determination regarding a

There are no exceptions to this rule.

(f) An application requesting a ruling on a matter which can be resolved by SARS

Comprehensive Guide to Advance Tax Rulings 15

There are no exceptions to this rule.

(h) An application that is submitted for academic purposes – section 80(1)(a)(viii)

There are no exceptions to this rule.