4.
4.1 The ruling process
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 xtraordinary
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 [email protected]. 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
[email protected].
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 [email protected].
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.