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Income Tax Act, 1962 (Act 58 of 1962)

Regulations issued under Section 91A of the Income Tax Act, 1962

Part 3: Permanent write-off of tax debt

7. Tax debts irrecoverable at law



1) Subject to subsection (2), a tax debt is irrecoverable at law if-
a) It cannot be recovered by action and judgment of a court; or
b) It is owed by a debtor that has been liquidated or sequestrated and it represents the balance outstanding-
i) after notice was given by the liquidator or trustee that no further dividend is to be paid or a final dividend has been paid to the creditors of the estate; or
ii) following the termination of a compromise or arrangement as contemplated in section 311 of the Companies Act, with the debtor’s creditors, which has been sanctioned by a court.


2) A tax debt is not irrecoverable at law if the debtor is a company or a trust and the Commissioner has not first explored action against or recovery from the personal assets of any director, shareholder, trustee or persons acting in the management of that debtor.