The Tax Administration Act (“TAA”) requires every company conducting business or having an office in South Africa to be represented by an individual residing in the Republic.
A Public Officer serves as the face of the company for all matters relating to the TAA.
What are the requirements
Section 246(2) of the TAA stipulates that a Public Officer must meet all the following requirements:
- Must be a senior official of the company and be approved by SARS S246(2)(a)
- Must have been appointed by the company or by an agent or attorney who has authority to appoint such a representative for the purposes of a Tax Act S246(2)(b) and must be called the Public Officer of the company S246(2)(c)
- The appointment must be made within one month after the company begins to conduct business or acquires an office in the Republic S246(2)(d).
Roles and Responsibilities of a Public Office
A Public Officer acts as the representative of the company as far as the company’s tax matters are concerned and has the authority to act on behalf of the company and is accountable to SARS.
Returns submitted by the company and payments made to SARS are considered to have been approved and submitted by the Public Officer as the representative of the company and as such, a Public Officer may be held liable for the tax liability of the company in his or her personal capacity. If the company cannot settle the liability, the public officer will be held responsible for the tax debt.
Representative Taxpayer and Public Office
A Representative taxpayer is defined in S153(1) of the TAA as a person who is responsible for paying the tax liability of another person as an agent, other than as a withholding agent. In as far as corporate entities are concerned, a person appointed and approved as the Public Officer will be regarded as the Registered Taxpayer.
The appointment of a Representative Taxpayer is now a mandatory requirement for the company to access and transfer tax types on the SARS eFiling profile
Tax Practitioners Serving as Public Officers on Behalf of their clients
It has often been the case that Tax Practitioners served as the Public Officer on behalf of their clients with the view that they have the appropriate knowledge of the client’s tax obligations and the skills to provide this service.
SARS has, in a Newsletter to Tax Practitioners dated 25 November 2021 indicated that SARS’s view in this regard is that Tax Practitioners are not qualified to act as Public Officers of their clients as the requirements of S246(2) of the TAA mentioned above are not met. While SARS acknowledges that S246 does not specifically preclude a Tax Practitioner from acting as a Public Officer of a company (provided the requirements are met), the practice of SARS has been to decline applications for appointment of Public Officers where the appointee is a registered Tax Practitioner with SARS but does not hold a senior position within the company.
Tax Practitioners are reminded that a Public Officer is regarded to be the representative of the company in as far as its legal obligations in terms of a tax act is concerned and may be legislatively held personally liable for any default by the company.
The obligation to appoint a Public Officer and by extension a Representative Taxpayer is an area of focus by SARS given the legislative command contained in S246 of the TAA. Corporate entities should be mindful of who it appoints as a Public Officer / Representative Taxpayer noting that such appointment must be approved by SARS. It is important that the company has a duly appointed person fulfilling the duties required of a Public Officer at all times.