An interesting judgment was handed down in the North Gauteng High Court on 3 October 2013 in the matter of Commissioner for the South African Revenue Service v Miles Plant Hire (Pty) Ltd (case no 23533/2013). Miles Plant Hire (Pty) Ltd (the taxpayer) was involved in a dispute with the South African Revenue Service (SARS) in terms of which an appeal was pending. The taxpayer adopted a resolution to file for business rescue. When SARS became aware of the resolution, it brought an application for the setting aside of the resolution, and for the taxpayer to be wound up in terms of section 177(1) of the Tax Administration Act, No. 28 of 2011 (the TAA).
Category: Objections & Appeals
Interpreting a judgment of the Supreme Court of Appeal – C:SARS v South African Custodial Services (Pty) Ltd 74 SATC 61 (SCA)
The South Gauteng Tax Court has recently had to make a determination of the effect of a direction given in a judgment handed down by the Supreme Court of Appeal in referring an assessment back to the Commissioner of the South African Revenue Service for correction. The matter that was heard by the SCA (C:SARS v South African Custodial Services (Pty) Ltd 74 SATC 61 (SCA)) had principally been concerned with whether improvements made to State property in terms of a public-private partnership constituted trading stock of the taxpayer. The costs incurred by the taxpayer had been claimed as a deduction on the basis that they were part of the cost of construction. Included in these costs were costs in respect of certain financial arrangements.
On South African tax compliance, tax morality and taxpayers’ freedom to do tax planning – Canada, Ireland and South Africa are not worlds apart
The upcoming Budget Speech comes against the backdrop of a depressing South African growth rate, stubbornly high unemployment, a depreciating Rand (with more US tapering still to come), continued strikes in the mining sector, deadly service delivery protests and declining tax revenues. On a more positive note: In November 2013 Minister Gordhan pointed to the continued growth in tax compliance by South Africans and said: “… the ability to collect tax revenue …to finance the provision of public services and socioeconomic infrastructure has been a cornerstone of our democracy these 20 years.”
Sars takes on South African billionaire
Pretoria – South African billionaire Mark Krok’s local assets, worth R298m, were placed under curatorship by the North Guateng High Court in Pretoria on Friday. The SA Revenue Service (Sars) obtained a final preservation order against the businessman. Judge Hans Fabricius confirmed a provisional preservation order granted in February last year against Krok’s South African assets. The assets include a large portfolio of shares in JSE-listed companies such as African Bank, BHP Billiton, Bidvest, First Rand, MTN, Vodacom, Sasol, SABMiller, and Tsogo Sun. They also include a plot in Plettenberg Bay, a R40m property in Clifton and a Jeep Sahara.
Poorly drafted and implemented tax planning arrangements: rectification v “grin and bear it"?
CIR v Sunnyside Centre (Pty) Ltd 1997(1) SA 68 (A) clearly stated that South African taxpayers must sleep in the (contractual) beds they make: “When a scheme works, no tears are shed for the Commissioner. That is because a taxpayer is entitled to order his affairs so as to pay the minimum of tax. When he arranges them so as to attract more than the minimum he has to grin and bear it.”
Tax Administration Act – Suspension of payment of tax
Any taxpayer who wishes to object to or appeal against an assessment issued by the South African Revenue Service (SARS) must be aware that their obligation to pay any tax under that assessment is not automatically suspended by virtue of the submission of the objection or appeal itself. Any taxpayer who wishes for an objection or appeal to first be concluded before paying the tax due under an assessment would have to lodge a separate request for suspension of payment of tax in terms of section 164 of the Tax Administration Act No. 28 of 2011 (the TAA).
Taxpayer – choose your weapon carefully
The Pretoria Tax Court made an interesting ruling in Income Tax Case No 1866 75 SATC 268.Section 32(1) of the Value-Added Tax Act, No 89 of 1991 (VAT Act) states that the following decisions of the South African Revenue Service (SARS) are subject to objection and appeal, namely:
Tax Administration Act – Understatement penalty regime
The draft Taxation Administration Laws Amendment Bill, 2013 (TALAB) was released by the South African Revenue Services (SARS) on 5 July 2013 for public comment. The TALAB proposes, amongst other things, that several amendments be made to the Tax Administration Act, No 28 of 2011 (the TAA) in respect of understatement penalties.
Ngoepe appointed as new tax ombudsman
By Chantelle Benjamin Retired Judge Bernard Ngoepe said during his appointment as SA’s new tax ombudsmad that he would like to create confidence with the public. Judge Bernard Ngoepe. (M&G) Newly appointed tax ombudsman retired Judge Bernard Ngoepe said on Thursday that his biggest challenge will be creating confidence in the newly established office so the public feel they have someone to assist them with their grievances against the South African Revenue Service (Sars).
The Respective Jurisdiction Of The Tax Court And The High Court
An aggrieved taxpayer who wishes to institute legal proceedings against SARS in relation to some aspect of his tax affairs must be sure to raise his grievance in the proper forum. That forum may be either the Tax Court or the High Court.