SARS lays down law on electronic tax records
THE South African Revenue Service (SARS) has gazetted prescriptions on the way in which electronic tax records may now be stored in terms of the new Tax Administration Act.
The act became effective on Monday and a notice from SARS commissioner Oupa Magashula ran in the Government Gazette prescribing the electronic form in which records, books of accounting and documents must be kept or retained.
SARS deputy spokeswoman Marika Muller said taxpayers were required to keep these records in hardcopy and original form in order to satisfy SARS that the records were not falsified or otherwise altered.
“However, in order to alleviate this burden on taxpayers, the tax acts have always allowed taxpayers to keep these records in electronic form if this is done in the form and manner prescribed by the commissioner.”
From Monday, the electronic records must be kept and maintained at a place physically in SA. If the data is kept at a location outside SA, authorisation from a senior SARS official will be required.
South African Institute of Tax Practitioners CEO Stiaan Klue welcomed the notice to guide taxpayers on the legal requirements when generating, maintaining and storing records electronically. “Taxpayers who store and maintain accounting or invoice records using cloud computing with servers in Canada, for example, must seek approval from a senior SARS official first.”
Such an official must be satisfied that the electronic system used by the taxpayer will be accessible from the person’s physical address in SA for the duration of the time the records have to be kept.
Mr Klue said it was to ensure that taxpayer information was available when SARS wanted to do an audit.
SARS must also be satisfied that there is an international tax agreement for reciprocal assistance in the administration of taxes between SA and the country where the records are kept.
In the event that the taxpayer uses an electronic platform that has been altered or adapted or is not commonly recognised in SA, then the manuals that are necessary to access and understand the electronic record keeping must be kept. If these do not “adequately” describe the system of record keeping, then the taxpayer must prepare and keep a written document that accurately describes the methods used.