TAX ADMINISTRATION ACT
Yes, SARS can hold you personally liable for certain taxes under the Tax Administration Act,
but they must do so BEFORE you liquidated the business.
A liquidation dissolves the business so no debt remains to be collected.
That is the one side of it.
The other side of it is that in all the hundreds of liquidations we have done, NOT ONE person was ever held personally liable by SARS after the liquidation.
The only SARS debt that a liquidation does not write off, is taxes due in terms of the Customs and Excise Act as those taxes cling to the manager of the business and not to the business.
The Tax Administration Act (Act 28 of 2011) (“the TAA”) states that the directors/members as well as their internal bookkeepers and external auditors can personally be held liable for the taxes of the business.
It is therefore so important that you take action to liquidate the entity if your taxes are in arrears and you can’t catch up, to avoid this personal liability.