It is important to note that verifications and audits are two different processes. In a simple explanation, verification is the "straightforward" process to confirm if the information you declared on your tax return is true and correct, whilst an audit is where the tax return is under deeper investigation which means they look at the finer details.
Supporting documents request
If SARS decides to review your tax return, they will notify you via a SARS letter on which they will either ask you for ALL your supporting documents applicable to the details declared on your tax return, or a specific list of documents you need to upload and submit to SARS.
Please be vigilant and ensure you read the SARS letter in full - this is a letter that should not be hastily skimmed.
For both verifications and audits, it is SUPER important to submit all the correct information/documents requested within the SARS letter.
You will need to ensure that you read the letter in detail. Some SARS letters provide an exact list of documents they require, however, there is a PITFALL in that some other letters, where SARS requests supporting documents to support ALL of your income declared, deductions and exemptions claimed, they provide an example list of documents which is NOT the full extensive list of documents they require. If you only submit the example list of documents, SARS will disallow the other deductions and exemptions for which you did not provide the applicable supporting documents.
Screenshot of the SARS letter where they request all documents and only provide an example list:
If you do not provide all the necessary documents to SARS, you stand a high risk that SARS will issue an additional assessment on which they will disallow some or all deductions claimed on your tax return. Once SARS has issued an additional assessment, you are no longer able to request a correction on your tax return. You will then need to file a dispute to request a correction on the assessment with all the applicable supporting documents. It is important to note that this is quite a lengthy process and will therefore delay the refund due to you, if applicable.
What to expect during the verification
What to expect when the verification is finalised
The verification can result in one of the following:
It is important to note that even though the verification has been finalised, SARS could still refer your tax affairs to be audited as part of the SARS compliance process.
What to expect during the audit
It is important to note, that audits are a more invasive process where SARS will require the finer details of your income, expenses and exemptions declared n on your tax return.
What to expect when the audit is finalised
At the conclusion of the audit, SARS strives to:
If you did not agree with SARS Audit Findings Letter (or did not respond to this letter) and SARS is still of the opinion a revised assessment must be issued, SARS will consider the imposition of understatement penalties. This will apply if there is an understatement of income. The penalty can vary from 0% to 200%.
If you are due a refund, it will only be paid out after the verification/audit has been finalised. A revised assessment could result in an amount due to SARS.
If SARS issued a revised assessment and you are not in agreement, you are able to dispute it by submitting an Objection.
Q & A
1. Who can be selected for verification?
SARS may select any taxpayer for verification as part of their tax administration efforts, which can include a risk-based selection process.
2. What must I do if my tax return is selected for verification?
You will need to submit the requested supporting documents as per the SARS letter before the due date or, alternatively, submit a correction of your tax return if there was a mistake made on the original submission.
3. How must I submit the supporting document to SARS?
If you submitted your tax return through TaxTim, you can submit the supporting documents through your TaxTim account.
You can also submit the supporting documents:
4. I only submitted some of my supporting documents to SARS, how can I submit the rest of the documents to SARS?
Once documents are submitted to the link opened on your eFiling profile, you are no longer able to add documents to the submission and you will need to submit the missed documents to SARS Online Query System with the applicable case number as per the SARS request letter.
5. Is there specific standards for the documents that must be uploaded to SARS?
Yes, there are the following standards:
6. What should I do if I have more than 20 documents to upload and some of them are more than 5MB?
You can use websites like Smallpdf to compress the documents which are larger than 5MB or combine documents to have less than 20 documents to upload and submit.
7. What will happen if I do not submit the supporting documents?
If you do not submit supporting documents to SARS or submit a RFC (Request for Correction), SARS will issue you a follow-up letter. If you still do not do the necessary within the specified timeline, SARS will issue a revised assessment based on the information available to SARS.
8. SARS issued an additional assessment in the finalisation of the verification, I am not in agreement. What should I do?
9. SARS issued an additional assessment and I am not in agreement. Can I submit a Request for Correction?
No, unfortunately not. Once SARS issues a revised assessment, you are no longer able to submit a tax return correction on eFiling and must proceed in submitting an objection.
10. Will my refund be paid out even though my tax return is referred for verification/audit?
No, unfortunately not. SARS will only pay out the refund once the verification/audit has been finalised. SARS normally pays out the refund within 7 working days from the date the verification/audit has been finalised.