SARS is Tightening the Noose: What Tax Practitioners Need to Know About Public Officer Appointments
As tax practitioners, you’re likely aware of the crucial role of a Public Officer in managing a company’s tax affairs with SARS. Recent developments signal that SARS is no longer willing to overlook companies that neglect to appoint one. Let's break down the changes in simple terms and what they mean for your clients.
What’s the Current Situation?
When a company is set up in South Africa, it must appoint a Public Officer within 30 days. This individual is essentially the company's tax representative—the go-to person for all things related to SARS. The Public Officer must be a senior company official residing in South Africa, or if no such person is available, someone suitable and approved by SARS.
Failing to appoint a Public Officer can lead to serious administrative headaches, including penalties. For local companies, SARS usually designates someone like a director or company secretary to take on this role if the company doesn’t appoint anyone. For foreign companies this process can become more complicated, especially if none of their senior staff are based in South Africa.
What’s Changing?
On 1 August 2024, the National Treasury issued the 2024 Draft Tax Administration Laws Amendment Bill. The key takeaway is that SARS is tightening the rules to ensure every company appoints a Public Officer, with no excuses.
Here are the main changes:
No More 30-Day Window: Companies will have to appoint a Public Officer right from the get-go, similar to how they receive their tax number when they’re formed. This eliminates any delay in getting a Public Officer in place.
Stricter Appointment Rules: If a company fails to appoint a Public Officer, SARS will automatically appoint someone from the company’s hierarchy. This could be the Managing Director, Financial Director, Company Secretary, or other senior figures, depending on who is available and suitable.
SARS Can Step In: If no one within the company is suitable, SARS can appoint any person they see fit to take on the role. If the current Public Officer becomes unsuitable, the company must replace them within 21 business days.
What Does This Mean for Your Clients?
For many companies, especially foreign ones, these changes could mean extra administrative work and the potential for fines if they don’t comply. Tax practitioners like you must advise your clients on these new requirements and ensure they have a Public Officer in place right from the start.
If you have clients who might struggle with these new rules—perhaps they’re a foreign company with no senior staff in South Africa—it’s worth discussing alternative solutions, such as appointing a suitable representative or getting SARS approval for someone else.
Final Thoughts
SARS is signalling that it won’t tolerate companies trying to sidestep their tax obligations by failing to appoint a Public Officer. By staying ahead of these changes and advising your clients accordingly, you can help them avoid unnecessary penalties and ensure they remain in good standing with SARS.
Keep an eye out for further updates and make sure your clients are prepared for these new requirements.