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High Court sets aside notice by SARS to debit a taxpayers bank account

Authors: Heinrich Louw and Ndzalama Dumisa. In the recent case of SIP Project Managers (Pty) Ltd v The Commissioner for the South African Revenue Service (Case Number 11521/2020) (as yet unreported), the High Court set aside a notice by the South African Revenue Service (SARS) to a bank to debit a taxpayers bank account in terms of section 179 of the Tax Administration Act 28 of 2011 (TAA), and ordered SARS to repay the amount to the taxpayer.

Who is liable when a payment is made in terms of an invoice that has been intercepted and altered?

Author: Roxanne Webster and Merrick Steenkamp. Gone are the days of receiving physical invoices. Most, if not all, invoices are now sent electronically. While this may be faster and seemingly more secure, there are still some risks involved. What happens if either the creditors or the debtors email accounts are hacked? What if the banking details on the invoice are changed without either partys knowledge and payment is made? Who is liable in such a scenario?

Legal professional privilege protection available to taxpayers too

Authors: Emil Brincker and Louise Kotze. In a litigious context, the doctrine of legal professional privilege provides that communications between an attorney and a client are protected from disclosure in litigious proceedings. The protection afforded to a litigant in terms of this doctrine is aimed at encouraging and protecting the full and honest disclosure of information by clients to their legal advisors when seeking legal advice, which is necessary for the proper functioning of the South African adversarial system of litigation.

A creature of statute: A decision about the Tax Courts power to increase understatement penalties

Authors: Louise Kotze and Louis Botha. In the recent judgment of Purlish Holdings (Proprietary) Limited v The Commissioner for the South African Revenue Service (76/18) [2019] ZASCA 04, the Supreme Court of Appeal (SCA) had to pronounce on the South African Revenue Services (SARS) entitlement to impose understatement penalties on Purlish Holdings (Proprietary) Limited (Taxpayer) and the quantum thereof.

SARS prescription only starts once tax return has been submitted

Author: Eric Madumo, a Candidate Attorney and Joon Chong, a Partner at Webber Wentzel. In the recent case of CSARS v Char Trade, the Supreme Court of Appeal (SCA) that prescription begins to run against CSARS when a return for secondary tax on companies (STC) is submitted to SARS by a taxpayer. In the Char Trade case, a return for STC had not been submitted by the taxpayer. Due to this, prescription had not begun to run against CSARS. The result of this is that CSARS was able to make an assessment in 2012 of the taxpayer’s liability amounting to ZAR 1,812,609 for the 2007 cycle.

Urgent reinstatement of tax compliance status granted

Author: Joon Chong, Tax Partner at Webber Wentzel. For certain taxpayers, a tax clearance certificate is of utmost importance in ensuring that it is able to receive payment and to tender for new services. In the recent Gauteng High Court decision (Red Ant Security Relocation and Eviction Services (Pty) Ltd v CSARS (2999/18)), the taxpayer applied for urgent interdictory relief for reinstatement of its tax compliance status in order to be able to generate a tax clearance certificate pending determination of review proceedings which it had instituted against CSARS.

The capital v revenue question in the context of government grants: The SCA decides in favour of the motor manufacturing industry

Author: Louis Botha and Louise Kotze. In the recent case of Volkswagen South Africa (Pty) Ltd v Commissioner for South African Revenue Service 80 SATC 179, the age-old question of whether a receipt is capital or revenue in nature was addressed by the Supreme Court of Appeal (SCA), in the context of government grants paid to motor vehicle manufacturers.

Ignorance is not bliss: A recent judgment about understatement penalties and a caution to taxpayers

Author: Louis Botha and Louise Kotze (Cliffe Dekker Hofmeyr)In the recent matter of Mr A & XYZ CC v The Commissioner for the South African Revenue Service (Case Nos IT13725 & VAT1426, IT13727 & VAT1096), which involved four combined cases, the South African Revenue Service (SARS) issued assessments to Mr A and XYZ CC (Taxpayers) relating to income tax for the 2007 to 2012 years of assessment and Value-Added Tax (VAT) for the 2006 to 2013 periods.

Major new tax burden introduced

Author: David Warneke (Partner and head of Tax Technical at BDO South Africa). The Taxation Laws Amendment Act of 2017 (Act 17 of 2017) which was promulgated on 18 December 2017 contains provisions, namely section 22B of the principal Income Tax Act and paragraph 43A of the Eighth Schedule to the Income Tax Act, that will result in a significant compliance burden for companies, even in cases in which they do not result in additional taxation. The provisions deal with disposals of shares in a company (say A) that are held by another company (say B) in circumstances in which B held a significant portion of the equity shares (which the Amendment Act defines as a qualifying interest) in A at any time within the 18 months preceding the disposal. Section 22B applies in situations in which the shares that are the subject of the provision are held as trading Read More …