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Tax Administration Act, 2011 (Act No. 28 of 2011)

Chapter 11 : Recovery of Tax

Part D : Collection of tax debt from third parties

181. Liability of shareholders for tax debts


(1) This section applies where a company is wound up other than by means of an involuntary liquidation without having satisfied its outstanding tax debt, including its liability as a responsible third party, withholding agent, or a representative taxpayer, employer or vendor.


(2) The persons who are shareholders of the company within one year prior to its winding up are jointly and severally liable to pay the tax debt to the extent that—
(a) they receive assets of the company in their capacity as shareholders within one year prior to its winding-up; and
(b) the tax debt existed at the time of the receipt of the assets or would have existed had the company complied with its obligations under a tax Act.


(3) The liability of the shareholders is secondary to the liability of the company.


(4) Persons who are liable for the tax debt of a company under this section may avail themselves of any rights against SARS as would have been available to the company.


(5) This section does not apply—
(a) in respect of a "listed company" within the meaning of the Income Tax Act; or
(b) in respect of a shareholder of a company referred to in paragraph (a).


[Section 181 substituted by section 68 of the Tax Administration Laws Amendment Act, 2013 (Act No. 39 of 2012)]