Author: Beric Croome On 7th March 2014 the Supreme Court of Appeal delivered judgment in the as yet unreported case of Commissioner for the South African Revenue Service v Mobile Telephone Networks Holdings (Pty) Ltd, (966/2012) [2014] ZASCA 4 (7 March 2014) which dealt with the deductibility of audit fees incurred for a dual or mixed purpose and the apportionment thereof for tax purposes in light of section 11(a) of the Income Tax Act 58 of 1962, as amended (‘the Act’) read with sections 23(f) and 23(g) of the Act.
Category: Court Cases
Medox Limited v CSARS HC 12795/14 NG – 18 Feb 2014
Introduction In this case the applicant applied to the North Gauteng High Court for an order declaring all income tax assessments that were issued in respect of years of assessment following its 1997 year of assessment null and void. Facts The applicant, trading as Drake Personnel carried on a trade in South Africa from 1976 until 1995 after which it
Customs and Excise – Search and seizure provisions unconstitutional
On 8 April 2013 in Gaertner v Minister of Finance [2013]75 SATC 184,the Western Cape High Court held that sections 4(4)(a)(i)-(ii), 4(4)(b), 4(5) and 4(6) of the Customs and Excise Act, No. 91 of 1964 (the Customs and Excise Act) are inconsistent with the Constitution, and declared them invalid. The declaration of constitutional invalidity has now been confirmed by the Constitutional Court in a unanimous judgment handed down on 14 November 2013.
Legal professional privilege and invoices from attorneys
Author: Heinrich Louw (DLA Cliff Dekker Hofmeyer) On 17 March 2014 judgment was handed down in the Western Cape High Court in the case of A Company v Commissioner of the South African Revenue Service (case no 16360/2013 – as yet unreported). The facts were briefly as follows. The applicants were three companies in a group of companies. In the course of conducting an audit in the applicants’ tax affairs, the South African Revenue Service (SARS) directed a request for relevant material at the applicants in terms of s46 of the Tax Administration Act, No 28 of 2011.
The Supreme Court of Appeal speaks on the apportionment of expenditure
It is trite that the deductibility or otherwise of expenditure incurred by a taxpayer is determined in terms of section 11(a) of the Income Tax Act 58 of 1962, read with section 23. Section 11(a) determines what expenditure qualifies for deduction, whilst section 23 prescribes what may not be deducted. Subsections (f) and (g) of section 23 have been described as the negative counterpart to section 11(a). (See Commissioner for Inland Revenue v Nemojim (Pty) Ltd 1983 (4) SA 935 (A) at 946H 947C.)
New page on the institution of legal proceedings
Author: SARS Legal and Policy What is it? The institution of legal proceedings is a process whereby a taxpayer delivers court papers to SARS requiring the Commissioner for SARS to appear and defend a matter in the High Court. Prior notice before the institution of the proceedings is required in some instances, particular in matters involving the State. What does the tax and customs laws say? There are two different Acts in terms of which the institution of legal proceedings against the Commissioner for SARS is governed and although they have a similar purpose, the requirements are not identical.
Unreported tax case judgment with case number: SARS 4/2013
Author: Caroline Rogers and Megan McCormack of ENSafrica In an unreported decision, Jen-Chih Huang and 13 others v Commissioner of SARS and others with case number: SARS 4/2013 and dated 18 November 2013 (“the Unreported Judgement”), Tuchten J of the North Gauteng High Court handed down an important judgment in relation to information and documentation obtained by the South African Revenue Service (“SARS”) in terms of Part D of the Tax Administration Act No. 28 of 2011 (“the TAA”).
CSARS v Mobile Telephone Networks Holdings (Pty) Ltd (966/12) [2014] ZASCA 4 (7 March 2014)
Introduction The Supreme Court of Appeal delivered its judgement for the case between Commissioner for the South African Revenue Service v Mobile Telephone Networks Holdings (Pty) Ltd (966/12) [2014] ZASCA 4 on the 7th of March 2014. This case concerns itself with the apportionment of audit fees incurred for a dual or mixed purpose in terms of section 11(a) read with section 23(f) and (g). Facts The group structure were as follows: the respondent,
GW van der Merwe & 12 Others v CSARS – HC 1984-14 WC – 17 February 2014
Introduction The Western Cape High Court recently delivered its judgement in the application lodged by the first applicant being GW van der Merwe and others, for an order that a temporary interdict be issued preventing the second respondent, Piet JJ Marais, from commencing an inquiry authorised by Davis J, in terms of a court order made by virtue of the provisions of Part C of Chapter 5 of the Tax Administration Act, No 28 of 2011, pending the final outcome of an application to declare the relevant provisions of the Tax Administration Act which authorises such enquiry unconstitutional and invalid. Further, the applicants requested an order to have the third applicant, Elle-Sarah Rossato, to allow them access to the court file in order to enable the aforesaid review application to be made.
SARS welcomes Gauteng North High Court judgment on Mr Mark Krok
PRETORIA, 31 JANUARY 2014 – Judgment was delivered earlier today in the Gauteng North High Court confirming a preservation order granted to the South African Revenue Service (SARS) over the South African assets of Mr Mark Krok (the respondent). The respondents were also ordered to pay the costs of two counsel for SARS. This action is the first mutual collection of taxes action between South Africa and Australia in terms of Article 25A of a Double Taxation Agreement between the two countries and an initial step to combating non-payment of taxes and strengthening the working relationship between South Africa and Australia. SARS welcomes the Gauteng North High Court judgment as it confirms an important legal principle of mutual assistance and cooperation amongst revenue authorities in different countries. SARS believes the judgment will advance the capability of revenue authorities to combat cross border tax evasion and attempts to conceal Read More …