How to Dispute a SARS Assessment or Penalty

By / September 19, 2025

If you receive a South African Revenue Service (SARS) assessment or penalty that you believe is incorrect, you have clear, […]

How to Dispute a SARS Assessment or Penalty

If you receive a South African Revenue Service (SARS) assessment or penalty that you believe is incorrect, you have clear, time-bound rights to challenge it. This comprehensive guide explains each step, the deadlines, what to file on eFiling, and the strategic choices that improve your chances of success. It also covers suspension of payment, requests for remission of penalties and interest, and when to escalate to appeal, Alternative Dispute Resolution (ADR), or the Tax Board/Tax Court.

Quick timelines you should know

  • Request for Reasons (Rule 6): File within 30 business days of the assessment if the basis for the assessment is unclear. SARS generally provides reasons within 45 business days, with limited scope to extend.
  • Notice of Objection (Rule 7): File within 80 business days of the assessment, or within 80 business days of SARS delivering proper reasons if you requested them.
  • Notice of Appeal (Rule 10): File within 30 business days after a disallowance of your objection. Extensions are possible on motivated grounds.

These are business-day deadlines. Count carefully and diarise the final date from the notice date on your assessment or the date SARS delivers reasons.

What you can dispute

You can dispute most assessments and a wide range of decisions, including:

  • Additional assessments for Personal Income Tax (PIT), Corporate Income Tax (CIT), VAT, PAYE and related levies.
  • Administrative non-compliance penalties (for example, recurring late filing penalties).
  • Understatement penalties attached to assessments.
  • Certain interest and late-payment penalties, subject to statutory criteria for remission.

These procedures are governed by the Tax Administration Act (TAA) and the Rules for dispute resolution. In practice, your route depends on whether the issue is a simple correction, a lack of clarity in SARS’ rationale, or a genuine disagreement on facts or law.

Choose the correct starting route

1) Request for Correction (RfC)

If the issue is your own input error on a filed return, a Request for Correction on eFiling is often the fastest route. It is available for specific tax types and common mistakes. Use this only where you are fixing your data, not where you contest SARS’ position.

2) Request for Reasons (Rule 6)

If the assessment is unclear, lodge a Request for Reasons within 30 business days. Ask SARS to explain precisely how it calculated the amount and which facts or law it relied on. Proper reasons help you frame an accurate objection. The 80-day objection clock then runs from when SARS delivers adequate reasons.

3) Notice of Objection (Rule 7)

If you already understand SARS’ rationale, or you have now received adequate reasons, file a Notice of Objection within 80 business days. This is a formal, structured submission with numbered grounds and supporting evidence.

How to draft a strong objection

A successful objection is precise, evidenced, and compliant with the Rules. Focus on the following:

  • Use the prescribed form on eFiling. Select the correct period and assessment.
  • Be specific. Identify each disputed line item and amount. Tie each ground to facts and legal provisions. Avoid broad statements such as “assessment incorrect”.
  • Attach proof. Provide invoices, contracts, schedules, IRP5s, EMP501 reconciliations, bank statements, and reconciliations that bridge from your evidence to your return figures.
  • Answer SARS’ reasons. If you received reasons, respond to each point.
  • Explain late filing if applicable. If the system flags your objection as late, you must motivate for condonation. Explain the timeline, why you missed the deadline, why there are reasonable grounds or exceptional circumstances, and provide evidence (for example, hospitalisation records, verified system outages, or objectively unavoidable events). Note that there are statutory long-stop limits after which condonation may not be available.

Practical drafting tip: Structure each ground as a mini-case. State the issue, the amount, what SARS did, why it is wrong, and what the correct outcome should be. Cross-reference annexures clearly.

Example: objection grounds template

Ground 1 – Disallowed medical expenses (R12 400)
Issue: SARS disallowed R12 400 claimed as out-of-pocket medical expenses on the basis that proof was insufficient.
Facts and evidence: Annexures A1–A15 include invoices, receipts, and bank proofs dated within the year of assessment. Annexure A reconciles each proof to the total of R12 400.
Law: These expenses meet the statutory definition of qualifying medical expenses borne by the taxpayer.
Relief sought: Reverse the disallowance and issue a reduced assessment reflecting the R12 400 deduction.

Ground 2 – PAYE credit mismatch (R8 317)
Issue: The IRP5 from Employer X (certificate number stated) was omitted from the assessment.
Facts and evidence: Annexure B includes the IRP5 and a letter from Employer X confirming PAYE withheld of R8 317, which ties to the EMP501 reconciliation.
Law: The PAYE credit must be recognised as tax already paid.
Relief sought: Include the R8 317 credit and issue a reduced assessment.

Replicate this structure for each disputed item. Keep the language factual and avoid emotion.

What happens after you object

SARS will issue a decision that either allows your objection fully, partially, or disallows it. If allowed fully, SARS issues a reduced or revised assessment. If partially allowed or disallowed:

  • You may request ADR to resolve factual or legal issues in a facilitated setting.
  • Or you may file a Notice of Appeal within 30 business days. Where appropriate, request an extension timeously.

During this period, collection can continue unless you have a valid suspension of payment in place for the disputed amounts.

Suspension of payment (Section 164)

South Africa follows a pay-now-argue-later principle. An objection or appeal does not automatically stop SARS from collecting. If immediate payment would cause prejudice and your dispute has merit, request a suspension of payment for the disputed amount.

A senior SARS official must weigh several factors, including your compliance history, the strength of your case, the risk to revenue, solvency, and relative prejudice. A suspension may be revoked if you do not pursue your dispute diligently or if circumstances change. Submit your request on eFiling, and ensure you attach a concise motivation with supporting documents, including your draft or filed objection.

ADR, Tax Board, and Tax Court

If your objection is disallowed (in full or part), consider:

  • Alternative Dispute Resolution (ADR): A time-boxed, facilitated process aimed at narrowing or resolving issues without a formal hearing. It is useful where the dispute turns on factual clarifications, reconciliations, or a narrow interpretive point that can be negotiated within the law.
  • Tax Board: Appropriate for smaller matters. It is less formal and can be quicker and cheaper.
  • Tax Court: For larger, complex, or precedent-setting matters. The process includes discovery, statements of grounds of appeal and grounds of assessment/opposition, and a formal hearing before a panel that includes a judge and expert members.

The dispute rules set out detailed timelines for exchanging documents and setting matters down. If ADR fails, you can proceed to the Tax Board or Tax Court depending on the amount and nature of the dispute.

Administrative non-compliance penalties and Requests for Remission (RFR)

Administrative penalties (for example, failure-to-submit returns) are typically recurring monthly until you become compliant, up to a statutory maximum number of months. If you believe the penalty is unfair or disproportionate, you can submit a Request for Remission (RFR) on eFiling. A strong RFR:

  • Explains the non-compliance and when it was remedied.
  • Shows that the default was minor, non-intentional, or due to circumstances beyond your control.
  • Attaches logs, correspondence, or proof of the claimed circumstance (for example, verified system downtime, hospitalisation, bereavement).
  • Demonstrates good compliance history where applicable.

If SARS declines your RFR, you may then object to the decision not to remit. Follow the usual objection rules and timelines.

Understatement penalties (UP): how they work and how to challenge them

Understatement penalties are percentage-based and depend on SARS’ view of your behaviour in the underpaid tax. The statutory table ranges from 10% (for a substantial understatement in standard circumstances) up to 200% (for intentional tax evasion with aggravations). The categories include:

  • Substantial understatement
  • Reasonable care not taken in completing the return
  • No reasonable grounds for the tax position taken
  • Impermissible avoidance arrangement
  • Gross negligence
  • Intentional tax evasion

You can challenge both the imposition of the penalty and the percentage applied. In cases of substantial understatement, a statutory remission may apply if you made full disclosure and held a qualifying, independent tax opinion obtained before filing. Where relevant, place that opinion and your disclosure on record as part of your objection.

Interest and late-payment penalties

Interest is intended to compensate the fiscus for the time value of money and is therefore more difficult to remit. However, in defined circumstances where the delay was beyond your control, SARS may remit interest, depending on the tax type and the specific provision relied upon. If you seek interest remission, explain the causal link between the event and the delay, attach proof, and ensure the timeline is watertight. It is common to submit interest remission together with an RFR in penalty cases.

Payment arrangements and compromise

If you owe amounts that are not disputed, consider these options to manage cash-flow:

  • Payment arrangements (instalments): You can request an instalment arrangement on eFiling. SARS will consider your financial information, compliance history, and the reasons you require terms. Provide a realistic proposal and be prepared to disclose current financials.
  • Compromise of tax debt: In situations of genuine financial distress, a senior SARS official may approve a compromise that permanently writes off part of the tax debt to secure the highest net return for the fiscus. This is a complex, document-heavy process. Treat it as a last resort, and seek professional assistance.

Step-by-step on eFiling

  1. Log in and select the tax type. Navigate to the return period or penalty transaction you wish to dispute.
  2. Open the assessment or penalty. For penalties, open the Penalty Statement or Transactions view.
  3. Pick the correct action:
    • Request for Reasons if the basis is unclear.
    • Notice of Objection if you are ready to dispute.
    • Request for Remission for administrative penalties and certain interest or late-payment penalties.
    • Suspension of Payment to defer collection on disputed amounts.
  4. Complete the online form carefully. Enter each ground, amount, and the precise period. Attach supporting documents. If late, complete the condonation motivation fully.
  5. Submit and track. Use the Disputes or Correspondence section to monitor statuses, respond to SARS letters, and upload any further requested documents.
  6. If disallowed, escalate. Consider ADR or file a Notice of Appeal within 30 business days.

Common mistakes to avoid

  • Missing deadlines. The 30-, 80-, and 30-business-day windows are critical. Diarise them.
  • Vague objections. Generalised statements or emotional arguments are ineffective. Use precise, numbered grounds with evidence.
  • No supporting evidence. Every factual claim should be backed by reconciliations and documents.
  • Incorrect remedy. Do not file an RfC when the problem is SARS’ interpretation, and do not jump to an objection when you lack adequate reasons.
  • Ignoring collections. If cash-flow is tight, request suspension of payment for disputed amounts and explore a payment arrangement for undisputed amounts.
  • Letting ADR drift. ADR is time-boxed. Prepare thoroughly and keep the process moving, or proceed to appeal timeously.

When to seek professional help

Consider appointing a tax practitioner or attorney if:

  • The amounts are material or cash-flow sensitive and you need a suspension of payment strategy.
  • The case involves complex legal interpretation, transfer pricing, anti-avoidance, or a significant understatement penalty.
  • Your objection is late and you need to establish exceptional circumstances.
  • You are preparing for ADR, Tax Board, or Tax Court, where procedural rules and evidence management can determine outcomes.

Action checklist

  • Read the assessment and diarise the final dates.
  • Decide whether you need a Request for Correction, a Request for Reasons, or an Objection.
  • If needed, file Reasons within 30 business days.
  • Build a coherent evidence pack and draft numbered grounds tied to line items and amounts.
  • File your Objection within 80 business days (or motivate for condonation with a documented timeline and evidence).
  • Request Suspension of Payment for disputed amounts.
  • If disallowed, pursue ADR or Appeal within 30 business days.
  • For admin penalties, file an RFR and become compliant to stop recurring charges.
  • For undisputed balances, consider a payment arrangement; if insolvent or distressed, assess compromise options carefully.

Bottom line

SARS dispute procedures are designed to be structured and fair, but they are unforgiving on deadlines and form. Start by deciding the right route, gather and present evidence methodically, keep to the 30/80/30 windows, and protect cash-flow with a suspension of payment where justified. If you meet the procedural requirements and argue a clear, evidence-backed case, your prospects of a fair outcome increase significantly.

Sources

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