The Pretoria Tax Court made an interesting ruling in ITC No 1866 [2013] 75 SATC 268. Section 32(1) of the Value-Added Tax Act No. 89 of 1991 (the VAT Act) states that the following decisions of the South African Revenue Service (SARS) are subject to objection and appeal, namely: In terms of section 23(7) of the VAT Act notifying that person of SARS’s refusal to register that person in terms of the VAT Act. In terms of section 24(6) or (7) of the VAT Act notifying a person of SARS’s decision to cancel, or refusal to cancel his registration in terms of the VAT Act.
Category: Tax Administration
Tax Administration Act – Criminal investigation in relation to a serious tax offence
The Tax Administration Act, No. 28 of 2011 (the TAA) took effect on 1 October 2012. In light of SARS’s strong emphasis on compliance, this article considers the procedures SARS should follow where it believes that a serious tax offence might have been committed. A “serious tax offence” is defined as “a tax offence for which a person may be liable on conviction to imprisonment for a period exceeding two years without the option of a fine or to a fine exceeding the equivalent amount of a fine under the Adjustment of Fines Act, 1991 (Act No. 101 of 1991).”
Taxation risk on Lost or stolen cheques
The principles to be applied in cases where cheques have been intercepted in the post and misappropriated by thieves have been summarised in previous case law, where it has been established that when a debtor tenders payment by cheque and the creditor accepts it, the payment remains conditional and is only finalised once the cheque is honoured. Accordingly, where the cheque is misappropriated and someone other than the payee, by fraudulent means, converts the cheque into cash, the risk will lie with the debtor since it is the debtor’s duty to seek out his creditor. However, where the creditor stipulates a particular method of payment and the debtor complies with it, any risk inherent in the stipulated method of payment is for the creditor’s account.
Setting aside business rescue
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).
Malema trying to delay case – Sars lawyer
Pretoria – Julius Malema is seeking to delay a sequestration case brought against him by the SA Revenue Service (Sars), the High Court in Pretoria heard on Monday. Malema’s legal team brought an application asking for the matter to be postponed because he wanted to reverse an admission of liability, which he signed last year during negotiations with Sars.
Firms seeking tax benefits face legal repercussions
THE tax consequences of decisions made in the boardroom have been highlighted in some recent court cases, where judgments were made against parties who had entered into transactions that were motivated by the potential tax benefits it would bring rather than the profits they would generate. A judgment laid down in the case of ABC vs the South African Revenue Service (SARS) heard in the Western Cape Tax Court last year reiterated the importance of paying attention to the details of a transaction as reflected in the financial statements, including related taxes. ABC acquired land with a forest on it and carried on forestry activities on the land. It then sold the land together with the forest for a specific amount, of which R144.7m related to the forest. The question before the court was whether the R144.7m should be included in ABC’s gross income.
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.”
Shauwn Mpisane: More than 100 tax fraud charges withdrawn
Durban tender queen Shauwn Mpisane has walked out of the Durban Regional Court a free woman after the state withdrew more than 100 tax fraud charges against her. Mpisane, the owner of Zikhulise Cleaning, Maintenance and Transport, was charged with defrauding the SA Revenue Service of R4.7 million by submitting false VAT invoices, but applied to National Director of Public Prosecutions Advocate Mxolisi Nxasana to have the case withdrawn over prosecutorial misconduct. This morning Nxasana was at court for the hearing, at which prosecutor Arno Rossouw told Magistrate Blessing Msane that he had been instructed to withdraw the case in terms of Section 6 (b) of the Criminal Procedure Act.
Amendments to the Tax Administration Act 2013
Author: Beric Croome (ENS) The Tax Administration Laws Amendment Bill, No. 40 of 2013 was introduced in Parliament on 24 October 2013. The President of the Republic of South Africa must still assent to the Bill and it must then be published in the Government Gazette before it becomes an Act. The Tax Administration Laws Amendment Bill (“TALAB”) contains various amendments of an administrative nature to various tax Acts administered by the Commissioner: South African Revenue Service. In this article it is not possible to deal with all of the amendments contained in the Bill and only the more important changes to the Tax Administration Act, No. 28 of 2011 will be dealt with.
Assumption of contingent liabilities
The South African Revenue Service (SARS) recently released its discussion paper (Discussion Paper) on the tax implications of the assumption of contingent liabilities in the context of a sale of business as a going concern and where the assumption of the contingent liabilities is in part settlement of the purchase price of the assets. Whereas the purchase price can generally be settled by, for example, a cash payment, the assumption of unconditional liabilities, loan account, or the issue of shares, the Discussion Paper specifically deals with the assumption of contingent liabilities.