Legal Guarantees for the Development of Russian-South African Economic Cooperation: Pre-trial Protection of Taxpayers in South Africa

The development of economic relations between Russia and South Africa is based on effective legal guarantees. Business taxation is a conflict-prone area, so a reliable mechanism for legal protection of non-residents in tax relations is necessary to create a favorable investment climate. In South Africa, court proceedings can take years, so pre-trial resolution of tax disputes is the only way to ensure prompt legal protection of a taxpayer’s rights. Currently, South Africa has a multi-stage system for pre-trial resolution of tax disputes, which combines the imperative nature of tax legislation and other areas of public law with the dispositive nature of private law, allowing taxpayers to choose their own procedural behavior. This ensures a balance between public and private interests in the area of taxation. Alternative methods of conflict resolution, such as mediation and arbitration, are particularly popular in practice. By using Alternative Dispute Resolution (ADR), a taxpayer can resolve a dispute by reaching an agreement with the tax authority on a tax assessment (resolution by agreement) or by adjusting tax calculations (resolution by settlement). If the application of ADR instruments does not lead to the desired result for the taxpayer, they have the right to file a complaint with an administrative tribunal (the Tax Council or the Tax Court) before going to court. The article analyzes the procedure for forming administrative tribunals and the decision-making procedures established in the Tax Administration Law of 2011. To resolve a dispute with the Revenue Service out of court, a taxpayer may also contact the Office of the Tax Ombudsman. The Tax Ombudsman’s mandate includes the consideration of any taxpayer complaints related to the application of tax laws by Revenue Service officials. The Tax Ombudsman resolves all disputes using mediation tools, trying to reconcile the taxpayer and the fiscal authority. A special feature of the Tax Ombudsman institution is its interaction in resolving tax disputes with the Public Protector, a human rights institution established in accordance with the Constitution of South Africa. Almost all legal remedies provided for by South African law for taxpayers are characterized by their efficiency and cost-effectiveness. To these should also be added the benefits associated with the digitalization of the tax process, which have become more active in the post-COVID period. They allow a foreign investor to almost completely transfer the legal process to an online format.

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