• 2 Marks

PT – Nov 2020 – L2 – Q1d – Tax Administration

Explains the condition under which overpaid tax can be used to offset a liability in another tax category.

Under what condition will a taxpayer who has overpaid tax in one tax type be used to offset another tax type or category?

When a taxpayer has overpaid tax in one area and has a liability in another area, it cannot be offset automatically. This can only be done by an application from the taxpayer or by an order of the courts. Otherwise, the taxpayer will have to pay the tax outstanding, and the overpaid amount will be carried forward as credit for the taxpayer.

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