1303. Registration of tax practitioners
June 2005 – Issue 70




Section 67A of the Income Tax Act No. 58 of 1962 (the Act) provides that every natural person who provides tax advice or completes or assists in completing any return to be submitted to SARS must register with SARS as a tax practitioner no later than 30 June 2005. Where the person commences conducting business as a tax practitioner he or she is required to register as such within 30 days from the date on which that person first provided advice in the tax arena or completed or assisted another person in completing any return submitted to the Commissioner.


Rationale for the introduction of the requirement to register as a tax practitioner

The authorities decided that it was appropriate for tax practitioners to register with a view to creating a separate body that will regulate those persons who conduct business as tax practitioners in South Africa. This will be no different to the regulation of tax agents in Australia and other persons conducting similar businesses in other countries. Currently, any persons, without belonging to any professional body and therefore not subject to any rules of professional conduct, may establish themselves as tax practitioners without the risk of facing any sanction in the event that they do not comply with a prescribed code of conduct.


The Minister of Finance indicated in his 2005 Budget Speech that the detailed legislation governing tax practitioners would be drafted this year after stakeholders are consulted.


Currently, attorneys, advocates and chartered accountants and other members of the accounting profession are members of professional bodies and are thus subject to rules of professional conduct. Unfortunately, a large number of persons are engaged in business as tax practitioners who do not currently belong to any of the recognised professional bodies and are thus incapable of being disciplined by a professional body in the event that they do not deliver a prescribed minimum standard of service. The initiative to require registration as a tax practitioner is, inter alia, aimed at ensuring that the public is protected in their dealings with tax practitioners and that the advisors in the tax arena render proper and sound advice to their clients.


Completion of form TP 1

SARS has now released the application form to register as a tax practitioner, namely, form TP 1. The form is available on the efiling section of the SARS website (that is It is possible to complete and submit the form electronically. At this stage SARS is only seeking to establish the number of persons carrying on business as tax practitioners as well as their personal particulars. No rules have as yet been prescribed as to the qualifications or the number of years of experience that persons must have in order to be registered as a tax practitioner. By submitting the form and supplying the necessary information a person will be automatically registered as a tax practitioner in conformity with section 67A of the Act.


The form calls for the applicant’s personal particulars and their identity number, income tax reference number and where applicable their Value Added Tax (VAT) registration number and other tax numbers as well. The rationale for calling for the tax numbers of applicants is to ensure that their own tax affairs are in order. If tax practitioners are unable to manage their own tax affairs it is questionable how they can assist and advise clients in ensuring that their tax affairs are up to date.


The application form requires disclosure as to the qualifications held by the applicant as well as the membership number of various professional bodies to which the applicant may belong such as the Law Society of South Africa, the South African Institute of Chartered Accountants, the Chartered Institute of Management Accountants, etc. Applicants are also required to indicate the nature of tax work undertaken, that is whether they are involved in completing returns for income tax, VAT and other taxes as well as whether they assist clients in tax dispute resolution and preparing opinions for clients on tax matters.


Those persons who are employed by an employer in order to provide tax advice to the employer for example, a group tax manager rendering advice solely to his or her employer will not be required to register as tax practitioners. Where a person renders tax advice for his or her employer to clients of the employer and such work is under the supervision of a partner or principal in an audit or legal firm such employee will not be required to register as a tax practitioner. The persons who supervise employees engaged in rendering advice to clients will be required to register as tax practitioners under the legislation.


Currently, the legislation provides that those persons who are involved in rendering advice solely in anticipation of any litigation to which the Commissioner is a party shall not be required to register as tax practitioners. Where, however, an advocate, for example, solely assists clients by preparing for and presenting cases in, for example, the Tax Court such person will not be required to register as a tax practitioner. However, many advocates and attorneys render advice and provide opinions on tax matters and do not act solely in anticipation of litigation with the Commissioner and will therefore be required to register as tax practitioners as well.


Where persons supply tax advice that is ancillary to their primary function they will not be required to register as tax practitioners under the provisions of the Act.


SARS has published various documents to assist persons in completing the form to register as a tax practitioner and guidelines as to those persons who should be registered under the provisions of the Act.


Where a person selling insurance policies sells retirement annuity policies, provides basic tax advice and does not complete tax returns such a person will, on the face of it not be required to register as a tax practitioner. Where, however, a person conducts business as a financial advisor and prepares opinions for clients on tax matters and completes tax returns for clients such a person will be obliged, under the provisions of the Act, to register as a tax practitioner.



All persons who must register need to do so before 30 June 2005 or within 30 days of falling within the ambit of section 67A. Failure to register as a tax practitioner as required constitutes an offence under section 75 of the Act such that a defaulting person can be prosecuted criminally and can be subjected to a fine or to imprisonment for a period not exceeding 24 months.


Once SARS has registered tax practitioners it will no doubt commence drafting the legislation governing the regulation of tax practitioners in South Africa. That legislation will contain details of the qualifications required and the work experience expected of persons in order to conduct business as a tax practitioner. More importantly, that legislation will no doubt prescribe the rules of professional conduct that tax practitioners must adhere to in order to be registered. It remains to be seen how the new regulatory body will be constituted and what additional costs tax practitioners will incur in order to maintain registration as tax practitioners in the country. It is hoped, though, that the requirement to register as tax practitioners will enhance the level of services rendered by tax practitioners to their clients, thereby protecting the general public.


Edward Nathan (Pty) Ltd


IT Act:S 67A;

IT Act:S 75